Comments on: Washington Banks Hit With More Bad Loans http://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/ local real estate news, statistics, and commentary without the sales spin. Sun, 21 Mar 2010 11:07:02 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Denny Retrogradehttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61292 Denny Retrograde Wed, 19 Nov 2008 16:49:57 +0000 http://seattlebubble.com/blog/?p=3416#comment-61292 (Comment reposted from April – still fresh I think:)

I remember the Puget Sound Business Journal did good reporting of local banks’ exposure back in January. It’s online now:
http://www.bizjournals.com/seattle/stories/2008/01/14/story7.html?t=printable

A bar chart was available in the print edition that showed reported September exposure to construction loans (home, commercial and land development) relative to average gross loans and leases:

10%: National average of all insured commercial banks
22%: First Savings Bank, Renton
31%: Washington First International Bank, Seattle
32%: Sterling Savings Bank, Spokane
34%: Cascade Bank, Everett
36%: Banner Bank, Walla Walla
41%: Horizon Bank, Bellingham
44%: HomeStreet Bank, Seattle
45%: Venture Bank, Lacey
48%: Frontier Bank, Everett
and the winner:
70%: City Bank, Lynnwood

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]]> By: Mike2http://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61287 Mike2 Wed, 19 Nov 2008 15:19:51 +0000 http://seattlebubble.com/blog/?p=3416#comment-61287 Jane: Buy a less expensive house.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61287','Mike2',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61287','Mike2','Jane: Buy a less expensive house.',''); return false;">Quote</a></div> Jane: Buy a less expensive house.
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]]> By: Bucerihttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61284 Buceri Wed, 19 Nov 2008 12:57:11 +0000 http://seattlebubble.com/blog/?p=3416#comment-61284 Jane:Bailouts, stimulus checks (when was the effect of these in the economy?), tax cuts. They only delay the inevitable. You cant' have an economy based on mainly consumption. You must "make" something; and we don't make much anymore.Back on topic. I agree with Tim, as Seattle numbers on all other categories were not as bad as the national average, it is surprising to see banks on the worse side.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61284','Buceri',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61284','Buceri','Jane:\r\n\r\nBailouts, stimulus checks (when was the effect of these in the economy?), tax cuts. They only delay the inevitable. You cant\' have an economy based on mainly consumption. You must \"make\" something; and we don\'t make much anymore.\r\n\r\nBack on topic. I agree with Tim, as Seattle numbers on all other categories were not as bad as the national average, it is surprising to see banks on the worse side.',''); return false;">Quote</a></div> Jane:

Bailouts, stimulus checks (when was the effect of these in the economy?), tax cuts. They only delay the inevitable. You cant’ have an economy based on mainly consumption. You must “make” something; and we don’t make much anymore.

Back on topic. I agree with Tim, as Seattle numbers on all other categories were not as bad as the national average, it is surprising to see banks on the worse side.

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]]> By: jonnesshttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61266 jonness Wed, 19 Nov 2008 03:43:30 +0000 http://seattlebubble.com/blog/?p=3416#comment-61266 Jane:How close to the pre-approval price was the house price?<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61266','jonness',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61266','jonness','Jane:\r\n\r\nHow close to the pre-approval price was the house price?',''); return false;">Quote</a></div> Jane:

How close to the pre-approval price was the house price?

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]]> By: Janehttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61265 Jane Wed, 19 Nov 2008 03:11:28 +0000 http://seattlebubble.com/blog/?p=3416#comment-61265 The effect of banks not able to loan is very bad.I recently got a pre-approval and went forward with home purchase. After few days the Bank called me and said that they would not be able to give me the loan.Though the bank said they were sorry, I think we need some kind of bailout from government so that banks would be able to lend and stimulate the economy.~Jane<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61265','Jane',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61265','Jane','The effect of banks not able to loan is very bad.\r\n\r\nI recently got a pre-approval and went forward with home purchase. After few days the Bank called me and said that they would not be able to give me the loan.\r\n\r\nThough the bank said they were sorry, I think we need some kind of bailout from government so that banks would be able to lend and stimulate the economy.\r\n\r\n~Jane',''); return false;">Quote</a></div> The effect of banks not able to loan is very bad.

I recently got a pre-approval and went forward with home purchase. After few days the Bank called me and said that they would not be able to give me the loan.

Though the bank said they were sorry, I think we need some kind of bailout from government so that banks would be able to lend and stimulate the economy.

~Jane

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]]> By: David Loshhttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61262 David Losh Wed, 19 Nov 2008 02:13:53 +0000 http://seattlebubble.com/blog/?p=3416#comment-61262 New construction is a game, a ponzi scheme, like many here like to point out.The bad debt from a single home owner barely makes a dent. A builder bankrupting a thousand units can add per cent ages to a banks balance sheet.In turn those units selling at a 50% discount can have an effect on pricing in an area. The same was true for driving prices up.The term "condo alternative" became a common phrase to convince a buyer to pay more for a stand alone house in questionable condition.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61262','David Losh',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61262','David Losh','New construction is a game, a ponzi scheme, like many here like to point out. \r\n\r\nThe bad debt from a single home owner barely makes a dent. A builder bankrupting a thousand units can add per cent ages to a banks balance sheet. \r\n\r\nIn turn those units selling at a 50% discount can have an effect on pricing in an area. The same was true for driving prices up. \r\n\r\nThe term \"condo alternative\" became a common phrase to convince a buyer to pay more for a stand alone house in questionable condition.',''); return false;">Quote</a></div> New construction is a game, a ponzi scheme, like many here like to point out.

The bad debt from a single home owner barely makes a dent. A builder bankrupting a thousand units can add per cent ages to a banks balance sheet.

In turn those units selling at a 50% discount can have an effect on pricing in an area. The same was true for driving prices up.

The term “condo alternative” became a common phrase to convince a buyer to pay more for a stand alone house in questionable condition.

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]]> By: Mike2http://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61261 Mike2 Wed, 19 Nov 2008 01:54:52 +0000 http://seattlebubble.com/blog/?p=3416#comment-61261 If local lending peaked near the bubble burst, you'd expect that the loans to be worse than average.That may be the nail in Seattle's coffin - the market didn't take off until lending reached peak credit bubble insanity.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61261','Mike2',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61261','Mike2','If local lending peaked near the bubble burst, you\'d expect that the loans to be worse than average. \r\n\r\nThat may be the nail in Seattle\'s coffin - the market didn\'t take off until lending reached peak credit bubble insanity.',''); return false;">Quote</a></div> If local lending peaked near the bubble burst, you’d expect that the loans to be worse than average.

That may be the nail in Seattle’s coffin – the market didn’t take off until lending reached peak credit bubble insanity.

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]]> By: Charles Deanhttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61259 Charles Dean Tue, 18 Nov 2008 23:48:38 +0000 http://seattlebubble.com/blog/?p=3416#comment-61259 I would think that some of these loans are loans to builders who got stuck over the fence on their houses. I am seeing most new construction right now with "leasing now!" signs.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61259','Charles Dean',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61259','Charles Dean','I would think that some of these loans are loans to builders who got stuck over the fence on their houses. I am seeing most new construction right now with \"leasing now!\" signs.',''); return false;">Quote</a></div> I would think that some of these loans are loans to builders who got stuck over the fence on their houses. I am seeing most new construction right now with “leasing now!” signs.
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]]> By: Jonnyhttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61258 Jonny Tue, 18 Nov 2008 23:06:53 +0000 http://seattlebubble.com/blog/?p=3416#comment-61258 The fall, yes. But also a bunch of feedback loops. As things come unhinged here in Seattle, it will lead to more unhinging. Leverage can move very large objects, whether financial or otherwise and so de-leveraging is likely to be a very nasty and drawn-out process. "Normalcy" won't return any time soon for the simple reason that the past 15 years or so have not been normal.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('61258','Jonny',''); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('61258','Jonny','The fall, yes. But also a bunch of feedback loops. As things come unhinged here in Seattle, it will lead to more unhinging. Leverage can move very large objects, whether financial or otherwise and so de-leveraging is likely to be a very nasty and drawn-out process. \"Normalcy\" won\'t return any time soon for the simple reason that the past 15 years or so have not been normal.',''); return false;">Quote</a></div> The fall, yes. But also a bunch of feedback loops. As things come unhinged here in Seattle, it will lead to more unhinging. Leverage can move very large objects, whether financial or otherwise and so de-leveraging is likely to be a very nasty and drawn-out process. “Normalcy” won’t return any time soon for the simple reason that the past 15 years or so have not been normal.
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]]> By: Slumlordhttp://seattlebubble.com/blog/2008/11/18/washington-banks-hit-with-more-bad-loans/#comment-61256 Slumlord Tue, 18 Nov 2008 21:54:01 +0000 http://seattlebubble.com/blog/?p=3416#comment-61256 I don’t think problems at local banks go against the “Seattle is special” mantra at all. In fact, I think it is symptomatic. Banks would not have over-lent had they not believed so faithfully the local real-estate market. Our very stability led to complacency and now the fall.

Recovery will depend on our willingness to let go of failed notions of special-ness and find new, productive, direction for the economy. We do have many civic assets and it is time to make better use of them. Here I refer to things like Metro/Sound Transit, local farms, hydropower, and most importantly a culture of innovation.

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