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That blows my mind. from this article in the Atlanta Journal-Constitution:
http://www.ajc.com/services/content/...lmain0215.html
The risks taken on by some banks were staggering. At the Community Bank in Loganville, which failed in November, loans to residential developers and home builders accounted for 80 percent of the bank’s total portfolio. John Fine, a former banking regulator turned consultant, said banks historically have been wary of getting above 40 percent in that category.
Georgia’s other failed banks made similar bets on real estate.
Other regions such as South Florida, Phoenix and Las Vegas saw home prices tumble even further and faster than Atlanta, but bank failures in those areas have not matched Atlanta’s.
Some experts said Atlanta’s home building industry differs from other high-growth regions in that it’s dominated by small home builders, which typically have much less of a cushion than big regional and national builders.
Veteran Georgia banking attorney Walt Moeling said Atlanta’s building frenzy went beyond that seen in other markets. The Atlanta region now has a staggering 150,000 vacant developed lots —- a 12-year supply at the current low rate of absorption.
http://www.ajc.com/services/content/...lmain0215.html
The risks taken on by some banks were staggering. At the Community Bank in Loganville, which failed in November, loans to residential developers and home builders accounted for 80 percent of the bank’s total portfolio. John Fine, a former banking regulator turned consultant, said banks historically have been wary of getting above 40 percent in that category.
Georgia’s other failed banks made similar bets on real estate.
Other regions such as South Florida, Phoenix and Las Vegas saw home prices tumble even further and faster than Atlanta, but bank failures in those areas have not matched Atlanta’s.
Some experts said Atlanta’s home building industry differs from other high-growth regions in that it’s dominated by small home builders, which typically have much less of a cushion than big regional and national builders.
Veteran Georgia banking attorney Walt Moeling said Atlanta’s building frenzy went beyond that seen in other markets. The Atlanta region now has a staggering 150,000 vacant developed lots —- a 12-year supply at the current low rate of absorption.
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