Monday, July 27, 2009

Widening Commercial Real Estate Crisis Hits U.S. Banks

Excerpt:

Wells Fargo & Co., for example, said 2.3% of its commercial real estate mortgages were considered nonperforming as of the second quarter, up nearly three-fold from 0.8% a year ago.

The San Francisco bank purchased its large teetering rival Wachovia Corp. at the end of last year, and Wells Fargo now holds $138 billion in commercial real estate loans, more than any other lender. Wachovia expanded aggressively into commercial real estate before falling victim to rising losses from consumer loans.

Nearly a third of Wells Fargo's total commercial real estate loans are tied to properties in California or Florida -- two regions among the hardest hit by the real estate depression.

Wells Fargo did not immediately respond to a request for comment.

http://online.wsj.com/article/SB124873477869684979.html?ru=yahoo#mod=yahoo_hs

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