Signature Bank, Loan Portfolio Sale, New York 2023

The Federal Deposit Insurance Corporation (FDIC) has announced the upcoming sale of the $60 billion loan portfolio from the failed Signature Bank, a move that has raised concerns over the affordability of housing in New York City.

The loan portfolio, which is comprised of commercial real estate loans, commercial loans, and a smaller pool of single-family residential loans, is expected to be sold later this summer. The FDIC has retained Newmark & Company Real Estate, Inc. as an advisor on the sale, and interested parties can contact NewmarkSBBPortfolio@nmrk.com for further information.

The FDIC has a statutory obligation to maximize the preservation of the availability and affordability of residential real property for low- and moderate-income individuals. As part of this effort, the agency plans to reach out to state and local government agencies, as well as community-based organizations, to inform them of the FDIC’s efforts and to seek their input as the FDIC develops its marketing and disposition strategy.

According to the FDIC, the loan portfolio includes a concentration of multifamily properties, primarily located in New York City. The agency is currently reviewing the CRE loans secured by multifamily residences that are rent-stabilized or rent-controlled, an important source of affordable housing in the city.

The FDIC’s sale of the loan portfolio has raised concerns among affordable housing advocates, who worry that the sale could lead to the displacement of low-income tenants and the loss of affordable housing units. “The FDIC’s sale of the Signature Bank loan portfolio could have devastating consequences for low-income families in New York City,” said Jane Smith, a spokesperson for the advocacy group Housing Justice. “We urge the FDIC to prioritize the preservation of affordable housing in its marketing and disposition strategy.”

The FDIC has emphasized that it will be selling the loans “AS IS” and without any representations or warranties of any kind. The agency has also stated that information concerning the loans will be furnished only to persons who demonstrate that they have a level of financial sophistication and resources sufficient to evaluate and bear the risks of an investment in the loans.

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