By MARCY GORDON, Jan 29 2010
This article explains the amount of bank failures since 2007 has been increasing, with the highest amount last year in 2009 with a total of 140 banks. In 2010 the number of bank failures thus far has reached 15, most recently in California, Georgia, Florida, Minnesota and Washington. The increase is due to the high amount of failed commercial and residential real estate loans, as well as the drop in housing prices and the rise in unemployment. Building developers have also begun to default on their loans as development projects fell short last year. It is believed that defaults on high risk loans could spike in 2010, and the amount of failing banks to be on the rise this year. So far the amount of bank failures has cost the Federal Deposit Insurance Corp $30 billion. The FDIC expects the total costs of saving banks to reach $100 billion over the next four years. In his State of the Union address, the President agreed to begin a $30 billion dollar program for community banks at low rates in exchange for increased lending to small businesses. This money would come from what is left of the $700 billion bailout fund.
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