Real estate, regional banking, and bank failures

Article Abstract:

Almost 60% of the bank failures between 1985 and 1991 occurred in Texas, Louisiana and Oklahoma. One reason for regional differences in bank failures is the relationship between bank performance and regional economic performance due to restrictions on interstate banking. Other factors in bank failures are deteriorating real estate markets, volatile interest rates, risk-taking encouraged by safety nets and competition from other financial institutions.

Finance, Regional economics, Bank failures

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Recent developments in credit tenant loans

Article Abstract:

The insurance industry has increasingly turned to credit tenant loans (CTLs) as an investment since the early 1990s. CTLs are mortgages that require a property's tenant to pay rent directly to the lender and assume responsibility for operating, insurance and tax costs. A CTL is similar to a sale-leaseback transaction. CTLs are attractive to insurers for management, tax, legal and regulatory reasons.

Insurance, Insurance Carriers and Related Activities, INSURANCE CARRIERS, Analysis, Interpretation and construction, Leases, Mortgages, Sale-leaseback transactions, Sale and leaseback

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Are reverse mortgages suitable bank investments?

Article Abstract:

Reverse mortgages offer older homeowners the opportunity to withdraw the equity in their homes without having to sell and move. There are three basic forms of reverse mortgages: tenure, term and line of credit. The high interest-rate risk of reverse mortgages will prevent their widespread use by commercial banks. Life insurance companies are a more logical holder of reverse mortgages.

Life insurance, Life insurance industry, Bank investments, Reverse annuity mortgages, Reverse mortgages

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