The most severe financial crisis since the 1930’s resulted in a nationwide drop in real estate values and the largest number of banking failures since 1992. The huge buildup of debt that fueled the bubble in real estate prices has resulted in a record number of mortgage defaults and foreclosures.
During 2010, a total of 157 banking failures occurred in 30 different states and Puerto Rico. As bad as the damage was, it is interesting to note that 40% of states had zero banking failures during 2010 and 10 states (20%) had only one banking failure.
The five States with the greatest number of banking failures were Florida with 29, Illinois with 16, Georgia with 21, California with 12 and Washington with 11. These “top five” banking failure states accounted for 57% of 2010’s total banking failures.
Many of the states with the highest number of banking failures are likely candidates for a repeat performance in 2011 due to the high correlation of negative equity with mortgage defaults. The latest statistics from CoreLogic show Florida with 47% of all mortgaged properties underwater and California with 32%. Two of the states with the highest loan to value ratios on mortgaged properties are Florida at 91% and Georgia at 81%.
2010 BANKING FAILURES BY STATE
|STATE/LOCATION||NUMBER OF FAILURES|