In one of my recent post I told you a little bit about mortgage delinquencies. I highlighted how long most loans are behind in foreclosure.
I posted it on my website if you missed it.
https://kevin-stokes.com/929-days-delinquent/
One has to wonder, why would banks let loans go that long?
Banks don’t like dealing with delinquent loans, they’d rather sell these non-performing loans at a discount than spend the money to foreclose.
Only problem is that doing so forces a bank to book the loss. Meaning the loss goes right to their balance sheet. Doing that affects quarterly earnings which indirectly affects executive compensation as well as potentially getting the attention of the regulators. Kinda the same way Silicon Valley Bank found itself in regulator receivership and then being bought by JP Morgan Chase for pennies on the dollar.
So the banks have no choice, they are stuck between bad and worse.
I don’t know how long the banks can keep this up but I’m guessing this slow death of small bank will result in America having 30-40% less banks in the next few years.
Stay tuned for more!
Kevin Stokes
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