Forget a courting period. Those who want to buy the assets of a failed bank need to get to the altar fast to clinch their union.
The entire process — from the time the Federal Deposit Insurance Corp. (FDIC) releases information on a failed bank buying opportunity until the closing is finalized — is over in just four to five weeks. That is why potential buyers, mainly existing banks, must have their ducks in a row to carry out due diligence, submit a bid and seal the deal.
Buying opportunities have burgeoned as the volume of bank failures across the U.S. has risen. From early 2007 through Feb. 4 of this year, federal regulators shut down 332 financial institutions with combined assets of $647.4 billion. Many were banks toppled by delinquent residential and commercial real estate loans. And dozens more closings are projected for the remainder of 2011 and 2012.
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