Banks' Troubled Real Estate Loans Up 36 Percent

WASHINGTON -- U.S. banks' troubled real estate loans rose for the fifth consecutive quarter to a total $66.9 billion at the end of the second quarter, the U.S. Federal Deposit Insurance Corporation said Wednesday.

Noncurrent real estate loans — those overdue by 90 days or more — were up 36 percent from a year before and up 10.6 percent from the end of the first quarter, the FDIC said.

Noncurrent home mortgage loans totaled $27.5 billion, up 47 percent from a year earlier and up 12.6 percent from the end of the first quarter, the FDIC said.

"Banks continue to face two key challenges — a difficult interest rate environment and ongoing weakness in residential mortgage lending," FDIC Chairman Sheila Bair said in a statement. "However, under the circumstances, the industry's second quarter earnings performance was very solid."

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