Jump to content

No Escape From TARP For U.S. Banks Choking On Real Estate Loans


Parsad
 Share

Recommended Posts

I think it matters a lot what type of CRE loans we're talking about.  For example, I feel more comfortable with loans secured by apartments.  I feel uncomfortable about loans secured by shopping malls.

 

Wells has a nice pie chart on page 22 explaining their CRE portfolio allocation:

 

https://www.wellsfargo.com/pdf/invest_relations/presents/nov2009/baab_110609.pdf

Link to comment
Share on other sites

yes, I remember Reichardt tenets when making a commercial real estate loan: it is all about people, credit, real estate (old annuals reports from 1991). Loans have to be secured by a cash flow producing asset, with a margin of safety above the interest rate. It is the reason why Wells Fargo don't like very much construction loans.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...