ICP Financial, a top real estate investment firm in the United States, has signed an agreement with a Top 5 European Bank to help bail out American commercial real estate banks.
This allows ICP Financial to buy distressed property and mortgage portfolios directly from US banks, for purchases between $5 million to $180 million at a time.
The partnership allows ICP Financial to leverage the financial firepower of its new backer, in bailing out small to mid-sized American banks that are in trouble, so they can start increasing revenue immediately.
In some cases, the firm also arranges private financing for banks in distress to raise more capital.
ICP Financial’s Managing Director, Brad Wozny, said, “We are extremely excited with this relationship. Everyone knows the wave of distressed commercial real estate mortgages coming due will continue. And with foreclosures in the United States expected to jump another 20 percent this year, American banks will be in a world of hurt.
“Their risk of being seized by the FDIC is huge. To avoid this from happening, they’ll need to quickly sell part, or all of, their mortgage and foreclosed property portfolios, and we’re here to help them do that. Then they can re-capitalize, and kick start their lending operations once again. With this agreement in place, we can help out many of those banks who are in distress quickly and efficiently.”
About their Europe-based banking partner, Wozny said, “They are global, have more than 50,000 employees, are well respected, and have nearly 125 years of banking experience. We are grateful they have selected our firm to help locate, analyze, and structure the bailout of small and mid-sized commercial real estate banks.”
When asked why commercial real estate lenders would need such a service, Mr Wozny explained, “Only banks who gave out residential mortgages received TARP money from the government. Commercial real estate lenders didn’t receive a penny of the benefits residential lenders are getting, and now with commercial real estate bank lenders, it’s a double-edged sword.
“Because they don’t have government bailout money,” he added, “and while the market is in a recession, their foreclosures are piling up and the FDIC is watching them like a hawk. So, in order to survive and thrive once again, they need to sell their distressed portfolio’s fast to raise cash, lend again, and avoid being seized by the FDIC.
“In certain cases,” he said, “we may also arrange for these commercial real estate lenders to receive money in advance of a sale of their assets. There are lots of options for them when we work together.”
For more on ICP Financial, visit www.icpfinancial.com/bankbailout .
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