Year to date there have been 57 banks that have closed in the US. On Friday the FDIC came in, took over and transferred assets and on Monday the new bank reopened with business as usual for 49 of the 57 banks. This is in contrast to the huge numbers of banks and savings and loans that went under in the 80’s during the savings and loan crisis.
So what happens to the REO assets of the banks that are not purchased or transferred? Most go the FDIC who assigns them to a subsidiary for management and distribution. Many of these REO or ORE portfolios are broken into smaller and/or regional packages of varying sizes to encourage more and higher bids. There is very little opportunity for the individual bidder as most of these packages are offered to a select group.
If you have a spare $10 million or so and are very well capitalized, you should be looking at websites announcing public and private sales and complete the qualifying process. Remember these are very sophisticated groups that have the knowledge and tools to fully evaluate the offerings and complete their “due diligence” before presenting their bids. For most of us, this means that there will be a waiting process until these REO assets are scrubbed and trickle down to the public. Expect 6 months to 3 years.