The Federal Deposit Corporation (FDIC) has a job to do and this job may be the biggest clean up effort by any government or non-government agency ever in the history of our country and quite possibly the world.
Their job is to clean up the toxic mortgages and assets left by failed banking institutions ceased by the the FDIC. The FDIC’s Division of Resolutions and Receiverships, which handles bank failures, already has a large office in Dallas Texas, but is anticipating many more failures and needs to prepare adequately for the avalanche of bank implosions to come.
There have been 15 bank failures since February 2007 following an uneventful two-year stretch. The last time the agency was hit hard with failures was during the 1990-1991 recession, when 502 banks failed in three years.
Historically, about six banks fail per year on average, The first bank failures this year went virtually unnoticed when the FDIC ceased two were small Missouri-based banks.
Already burdened with troubled assets from failed banks in Arizona and Nevada, which like California have seen huge declines in home values, It was reported today in the LA Times that the Federal Deposit Corporation (FDIC) is actively looking to secure office space in Southern California area in an effort to house as much as 600 employees.
These new employees will have the very important task to handle the banking clean-ups under the leadership of Shela Bair. Their jobs will consist mainly in performing loan workouts (loan modification, short sales etc.) on failed banking institutions in the Western United States.
FDIC spokesman, David Barr told the times that the agency needs 200,000 square feet of space and has looked at locations across Southern California. The locations previously being considered were sites near Pasadena and in the Inland Empire but is now focused on Orange County, particularly Irvine, said a person who wasn’t authorized to discuss it publicly and spoke on condition of anonymity to the Times
Apparantly the FDIC is now focused on Orange County, particularly Irvine. Currently the FDIC’s only other “permenant” office location is in Dallas Texas.
Orange County was the notorious subprime capital of the world and home to several major subprime lenders who sold these same toxic mortgages that the FDIC is seeking to clean up. Most all have imploded (almost 300 failed lenders to date) and scattered like cockroaches once their credit lines were frozen. Now, the spaces where these lenders once dwelled in Orange County are now vacant and some even fully and decadently furnished with the subprime bought trappings of an era gone forever.
Combine that with the extreme surplus of former loan professionals looking to do just about anything to make a living (even workout the same toxic loans they sold) and you have the perfect loan workout storm.
Other selling points on the OC for the FDIC is the close proximity of John Wayne Airport because many senior FDIC officials now at IndyMac are commuting weekly from homes in the Washington and Dallas areas.
The FDIC also had offices in Irvine throughout most of the 1990s.
So, the agency is very familiar with Orange County, which was home to many of the savings and loans that collapsed in the late 1980s and early 1990s. The offices were located in Costa Mesa that moved to Newport Beach before closing in 1996.