In 2009 140 banks were taken over by the FDIC. In 2010, 157 banks failed. It is estimated that those numbers will increase in 2011. Many times, when a bank is taken over by the FDIC another bank will acquire it. If an acquiring institution is not located, the FDIC fulfills its obligation to insured depositors by mailing checks for their insured amounts. The FDIC insured amount is typically $250,000. Contact your bank to determine that your saving and checking accounts are fully insured. The assets or loans made by the failed bank are often sold in a bidding process by the FDIC to companies like Strategy Zone, Inc.
Banks fail because too many of the loans made are in default. Why are the loans in default? Owners of businesses could no longer afford to pay for the monthly payments on their property because their net operating income (NOI) was insufficient. Lease rates have decreased since the economy headed south in 2007 and property values have plummeted in both the commercial and residential arenas making it difficult for a commercial property owner to meet the debt service coverage ratio (DSC) or the loan to value ratio (LTV) requirements.
There are many banks "in trouble" out there. Banks have ratios they have to meet just like the small business owner. Many of these banks have to sell distressed notes to "get them off their books" in order to stay solvent. That is where we come in.
The goal here at Strategy Zone, Inc. is to purchase these properties at a price that will allow the borrower to retain their business, meet the DSC and LTV requirements for a new loan and make real estate investors money in the process.