We have seen further deterioration in the residential land portfolio during the second quarter. … M&I has $2.3 billion in residential land loans to individuals and developers. $1.5 billion, or 66%, are located in Arizona . The bulk of the Arizona loans, nearly 70%, are in Maricopa County . … LTVs are approximately 115%. Residential land accounts for $219 million of nonperforming loans of which 55% are based in our Arizona business unit.
LTV is the amount of a loan that is paid off. 0% means it’s paid off completely. 100% means nothing has been paid. 115% means people owe 15% more than when they did when they originated their loans. This is across all of their loans! And apparently, they’re stating that they took on NO subprime loans. When your regular prime loans have such high LTV, that’s a terrible thing for the state of the bank. Imagine what that means for all banks if even those who loan properly are getting hammered?
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