Monday, November 23, 2009

The FDIC's New Role as a Property Owner...

Bruce Krasting, a blogger with interesting points about a variety of real estate and land use issues, is now reporting that the FDIC is refusing to disclose the results of various property auctions it held for real property it acquired after closing several Georgia banks:

In October the FDIC held a large auction of properties it had acquired as a result of failed banks in Georgia. I thought this was an interesting story and wrote about it before the auction took place. It was my intention to write about it again after the results of the auction were released. No such luck. The FDIC has decided to keep us in the dark on this one.

The following is an email I got from JP King, the auction house who ran the Georgia auction: “Unfortunately, FDIC has prohibited us from releasing any information regarding the auction. We've been trying to get them to let us release the results, but they have denied our requests. We aren't allowed to release any details.” I would have thought that the results of a pubic auction of properties owned by FDIC would have to be publicly disclosed.

So why is the FDIC trying to cover this up? The answer is that the REO problem for the D.C. lenders and the FDIC is reaching a crisis level. In spite of every effort to avoid foreclosures the fact is that the number of properties owned by the Feds is rising on a daily basis.

Simply put, this is outrageous and runs completely counter to any credible claim about the federal government embracing a policy of transparency.  I don't want to turn this into a political issue because it's much more than that.  It is now a systemic problem, if not fraud. Indeed, both parties are complicit in this situation.  Which, in some ways, makes it even more disturbing.

Here you have the federal government (in this case the FDIC) owning real estate, placing that up for auction, and then refusing to disclose the results.  I've reviewed the relevant statutes and cannot find any legal authority allowing the FDIC to prevent the disclosure of this information.

There is simply no way for local governments to reliably assess the value of property for taxing purposes if this type of obfuscation continues, much less permit the private market to accurately value real property for sales and development purposes.

--Chad Emerson, Faulkner U.

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Hello Chad, I was looking through the web and found your comments on my blog re the FDIC. Thanks.

I have been working on something for a while. It is a legal issue. I don't have the legal skills to make the case I want to make.

Are you a lawyer? Interested in getting involved with this?

Let me know.

Posted by: Bruce Krasting | Dec 13, 2009 6:34:09 AM