What We're Hearing

During the height of the financial crisis it was thought that nonbank mortgage lenders might be looking at a dim future. But over the past month I've been hearing increased reports about nonbanks kicking many tires of ailing commercial banks. Profit margins have been so fat the past 18 months that several highly profitable nonbanks are looking at taking control of depositories that are (shall we say) "capital challenged." The play is this: take over the bank and use it as a source of warehouse funds. Of course, it's not all that simple. The buying nonbank must pass muster with the Federal Deposit Insurance Corp. But the real challenge, I'm told, is this: if a nonbank is successful in purchasing an ailing depository, how will it manage the "real estate" risk on the books of that bank?