News headlines of late are filled with bad news about mega losses for banks, investment firms and the GSEs…

• Earlier this month we saw IndyMac Bank taken over by regulators. With assets of $32 billion as of March 31, it was the second-largest institution to go down in U.S. history. Resolving the failure won't be cheap, either. The FDIC estimates the cost at anywhere from $4 billion to $8 billion.

• Megabank Wachovia was practically swimming in red ink, recording a loss of $8.9 billion, or $4.20 per share, in the second quarter. Analysts were looking for a loss of just 78 cents per share. The bank said it plans to slash almost 11,000 jobs. It also took the knife to its quarterly dividend, cutting it 87% to just 5 cents a share.

• Merrill Lynch just disclosed it was creamed by $40 billion in investment write-downs in the second quarter — $69 billion so far this year.

• Citigroup has revealed a $2.5 billion loss — and a decline in total assets of a staggering $99 billion so far this year.

• Plus the government GSE’s, Fannie Mae and Freddie Mac are on the verge of going under.

What about the smaller regional banks? More bad news…

• Regions Financial turned in a 55% drop in profit.

• Fifth Third of Cincinnati lost $202 million, a huge swing from a year ago, when it generated $376 million in net income.

• KeyCorp of Cleveland did much worse. Its quarterly loss: $1.13 billion, vs. year-ago income of $334 million.

• Buffalo's M&T Bank has announced a $100 million loan loss provision, more than triple the $30 million of a year earlier. Net charge-offs of bad debt surged to $99 million from $22 million. Second quarter profits dropped 25% year-over-year, widely missing its estimates.

• Cleveland's National City lost $171 million in the first quarter, a huge swing from its year-earlier profit of $319 million. The company had to offer big enticements to investors in order to raise $7 billion in capital earlier this year. And even that large infusion is not likely to be enough.

All these entities are victims of the housing market melt down.  Here’s the latest news on this crisis:

Treasury Secretary Paulson predicts 2.5 million home foreclosures in 2008; and Fed Chairman Bernanke has testified that the crisis will continue deep into 2009. So, in combination, these two high officials are warning of potentially millions more foreclosures in 2009.

U.S. home foreclosures just surged 53% in June. They’re at the highest levels in recorded history.

Home prices continue to plunge. But they still have a long, long way to go as the following chart reveals.

The housing crisis has spread to every major sector in the economy.

These losses and market conditions have forced a number of banks to tighten the purse strings on new loans including commercial loans.  Also, bank regulators are taking a closer look at banking activities and requiring banks to increase their reserves.  

Many borrowers feel stuck if they live in an area where their banker is not making commercial loans like they used to.  What to do?

The good news for commercial property owners is…

I know you were reading patiently for this.

Not all banks are in trouble and they are still making loans on commercial property.  The trick is how to find out who they are if they are outside your area.

A little-known service is available to commercial borrowers, not only prepares an independent loan application for them, putting their loan request in the best possible light, it also pre-approves the loan request based on standard bank underwriting guidelines.

The best part is, a borrower can then have their application package electronically submitted to nearly 100 national and regional banks and other funding sources still actively funding commercial loans and get loan quotes in just a few days.  This eliminates the problem of being located in an area of the country where the banks are saying “No” to new loans.

This Loan Packaging Service is available through this website.  If you are actively seeking financing or will do so in the near future, review more details here, at Commercial Loan Services.

Technorati Tags: commercial real estate, commercial real estate loans, commercial property, commercial property loans

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