From Texas to Florida to the Northeast, sharp increases in the number of financial institutions reporting troubled real estate assets foreshadowed fundamental problems among S&Ls that ultimately fell into federal government hands. Regulators of the nation's banking system have warned recently of seeing similar strains, although most banks stand on a much more solid base than did many small S&Ls.
The report from the Wakefield, Mass., bank consulting company Veribanc Inc. found that the jurisdictions that make up the Washington area lagged behind only New England and the New York area in the growth rates of their "nonperforming" real estate loans in the first quarter of the year, referring to loans that are in default and are no longer paying interest. The overall percentage of problem loans locally still is below levels in New England and New York.
Nationwide, Veribanc found that real estate loan performance in 29 of the 50 states had deteriorated from the previous year. In seven states, more than 10 percent of all real estate loans are in default, Veribanc said.
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