The Small Georgia Banks effected by the Bank Foreclosures Sales
Posted in Bank Foreclosures, January 12th, 2010 by Bhatia
The small banks have been rocked enough in the Georgian communities with bank foreclosure sales partially as they lacked workforce with understanding and expertise to help resolve certain multifaceted financial troubles due to the crisis of foreclosure. Joe Waites, a partner and bank consultant with Minerva Consulting LLC, observed that, majority of the banks in the community fail to address timely, the issues regarding mortgage defaults until it was too late to recover the loans.
The bank researchers feel that at least, 30 such banks that are located in Georgia and have been unsuccessful since August 2008 and till December end and within the initial few weeks of January at least five more will supposedly disintegrate if the investors do not aid them.
The Piedmont Community Bank, High Trust Bank, Bank of Ellijay, First Bank of Dalton and Northwest Georgia Bank are the banks in distress that were warned previously by the Federal Deposit Insurance Corporation in Georgia. The bank regulators had ordered them to work on their balance sheets and to reduce the number of defaulting borrowers that they have.
For example the Piedmont Community, is currently having mortgages worth $26 million. These have a risk of being included in the list of bank foreclosure sales in December 2009, and it is a sharp hike from $6 million during December 2008.
Georgia since the initial weeks of December has topped among the states that have the maximum number of banks that have failed with the loans and mortgages. Apparently, the regulators shut down 24 of the banks in Georgia in the last year. These banks in fact, represented a chunk of the banks among 130 banks that failed across the nation. The Buckhead Community Bank, First Security National Bank and Tatnall Bank of Reidville were the banks that faced the consequences within the very first week of December in Georgia.
According to Waites, the bank consultant, the bankers of the community find it tough to spoil their terms and relations with their clients with whom they have indulged in business transactions for years. Their relations with the clients had almost become like a family.
In Georgia, the bank analysts observed that majority of the loans in distress belong to the commercial and residential property sectors. The towns and cities have numerous incomplete subdivisions, empty office buildings across Georgia, especially after the issue of housing meltdown took place.
While the superior banks like the Bank of America, SunTrust Banks and Synovus Financial could get rid of the issues related to bad loans, the minor banks of the community lacked enough funds and they did not get the required amount of help to recover from the losses due to the bank foreclosure sales.
