Have banks' Other Real Estate Owned (ORE) rates seen their peak?

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After a five-year growth, Datagy quarterly bank data analysis shows ORE rates might have reached their plateau.

The growth of ORE over time

Graph 1: The growth of ORE over time

The national trend shows growth over the last five years, however, data from the last three quarters indicate we may have begun a leveling period.

ORE is generally created by loan foreclosures by a bank and can be foreclosure of single family homes, land, construction, multiple family homes and shopping centers among others. The national trend shows growth over the last five years, however, analysts at Datagy feel data from the last three quarters indicate we may have begun a leveling period.

(Refer to Graph 1 and Table 1)

While the peak may be leveling off, the mix of foreclosed property and the sheer size is daunting.

(Refer to Chart 1)

While the total ORE has grown substantially between the years, it is also interesting that the mix of assets has changed over the years. Note that in 2007 the “1-4 family residential” was almost half of the total (44% of total) but in 2011 “Construction and Land” is the largest (35.50% of total). The amount and mix of the ORE will have an impact for years to come.

(Refer to Chart 2 and Table 2)

Datagy was founded back in 1995 to provide ready access to bank 'call report data', we've grown from providing bank regulatory information to harnessing regulatory information for the broad range of financial institutions, including thrifts, credit unions and bank holding companies.

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Eric McGehearty
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