by Calculated Risk on 8/10/2009 09:01:00 AM

The following article is similar to the Chicago Tribune article last week, Corus Bankshares Inc. on cusp of crisis, but adds a little local color in Florida.

From the Miami Herald: Soured loans on South Florida condos sinking Corus Bankshares

Heavy with $182 million in construction loans, the long-awaited Trump International Hotel and Tower, a luxury hotel condominium in Fort Lauderdale beach, stands furnished, but empty, with not a single tenant inside.
...
Close to foreclosure, the structure is part of Corus Bank's deeply troubled loan portfolio, which as of May 31 includes 14 outstanding condo loans in South Florida, of which 12 are over 90 days past due. At almost $1 billion, these South Florida construction loans form half of the $2 billion nonperforming loans across the United States that led Corus to warn last month that it may fail.

Corus is long past the June 18 deadline imposed by regulators to raise $390 million in capital, and many believe the Federal Deposit Insurance Corp. will seize the bank within a month -- once it finds a buyer.
...
According to Corus' financial statements, a key reason it lent so much money in Florida was ``the existence and strength of pre-sale contracts.'' Unlike most other states, Florida allows developers to sell condominium units before construction begins. Buyers generally put down a 20 percent deposit, of which half is used on construction costs. Essentially, these act as interest-free loans for the developers, who typically take out short-term loans from banks (like Corus) to build the condos. If the depositors walk away, however, developers are left with an empty building.

Also on potential bank failures, check out the Problem Bank Link (unofficial) I posted late Friday (Credit: surferdude808).