The Real Deal Miami

Banks hit by bad loans

June 06, 2008 11:03AM

Banking industry troubles will continue as institutions come to terms with the many bad loans taken out to finance new home construction. This comes in addition to homeowners defaulting on their mortgages. Banks have begun to dump loans and expect billions of dollars in losses. According Federal Deposit Insurance Corp. Chairman Sheila Bair, banks that aren’t diversified and have high exposure to residential construction and development are in trouble.