Wednesday, August 22, 2007
OTS "Kept Up At Night"
Happy Wednesday, everyone.
WASHINGTON-(Dow Jones)- The number of troubled assets among federally regulatedthrifts rose rose 49% in the second quarter from 12 months before tothe highest level since the savings and loan crisis, the Office ofThrift Supervision reported Tuesday.
The agency also reportedthat the number of "problem thrifts," or companies rated poorly byregulatory standards, had risen to 10, up from just 4 in the secondquarter of 2006.
Still, the regulator said that although the836 thrifts it regulates are continuing to feel stress from housing andliquidity markets, the overall health of the companies remains strong,based on earnings and capital.
Thrifts are federally regulatedbanks that originate one out of every four mortgages. The companieslargely originate prime or jumbo loans, so their stressed loanportfolios suggest that more loan types - not just subprime mortgages -are under pressure.
The thrift industry had $14.2 billion introubled loans, which are either noncurrent loans or repossessedassets, the OTS said. That's up from $9.5 billion in the second quarterof 2006. This is the highest level of troubled assets since 1993,though as a percentage of total assets its only the highest level since1997. Noncurrent loans include mortgage delinquencies, which have grownprecipitously as the adjustable-rate mortgages that were very popularduring the recent housing boom reset into much higher monthlycommitments.
"This is what is keeping us as regulators up atnight," James Caton, director of financial monitoring and analysis,said at a press briefing to discuss the data.
OTS "Kept Up At Night"
Happy Wednesday, everyone.
WASHINGTON-(Dow Jones)- The number of troubled assets among federally regulatedthrifts rose rose 49% in the second quarter from 12 months before tothe highest level since the savings and loan crisis, the Office ofThrift Supervision reported Tuesday.
The agency also reportedthat the number of "problem thrifts," or companies rated poorly byregulatory standards, had risen to 10, up from just 4 in the secondquarter of 2006.
Still, the regulator said that although the836 thrifts it regulates are continuing to feel stress from housing andliquidity markets, the overall health of the companies remains strong,based on earnings and capital.
Thrifts are federally regulatedbanks that originate one out of every four mortgages. The companieslargely originate prime or jumbo loans, so their stressed loanportfolios suggest that more loan types - not just subprime mortgages -are under pressure.
The thrift industry had $14.2 billion introubled loans, which are either noncurrent loans or repossessedassets, the OTS said. That's up from $9.5 billion in the second quarterof 2006. This is the highest level of troubled assets since 1993,though as a percentage of total assets its only the highest level since1997. Noncurrent loans include mortgage delinquencies, which have grownprecipitously as the adjustable-rate mortgages that were very popularduring the recent housing boom reset into much higher monthlycommitments.
"This is what is keeping us as regulators up atnight," James Caton, director of financial monitoring and analysis,said at a press briefing to discuss the data.
