The Federal Deposit Insurance Corp.’s resolution and receivership division managed to sell off 2,259 real estate assets from failed depository institutions for a sales price of $620 million last year, according to a report from the FDIC Office of Inspector General.
The assets, which held a book value of $1.5 billion, were sold from Jan. 1, 2011, through Nov. 30, 2011.
As of December, the agency had 1,398 real estate assets on its books with a book value of $1.2 billion. The OIG studied the FDIC resolution and receivership division’s handling of the real estate assets and found that appraisals, sales and other parts of the process were handled in accordance with established guidelines. But the OIG believes the division could strengthen the monitoring of budgets and costs and improve property inspection reports and the transfer of ownership interests when moving assets.
“Enhanced procedures in these areas could promote efficiencies and consistency in DRR’s management, marketing, and disposition of ORE assets,” the OIG report said. “Our report also includes an observation regarding weaknesses in ORE budget case documentation that DRR is working to address.”
The FDIC division ends up managing and selling numerous single-family, condo and real estate assets tied to failed banks. To improve the process of moving the assets, the OIG recommends that the FDIC develop a standard process for comparing actual costs on real asset assets to approved budgets, while also creating a standard location for the filing of property inspection reports. In addition, the agency suggests new procedures for moving REO assets between account officers to enhance communication and the sharing of important records.