FDIC sells $85.5 million in area loans. (Federal Deposit Insurance Corp., San Antonio, Texas area)

FDIC sells $85.5 million in area loans

Investors buy notes at bargain basement prices, reap high rates of return

In true clearance sale fashion, the Federal Deposit Insurance Corp. sold $85.8 million in loans assumed from failed South Texas banks since the beginning of 1989 for about $37 million, or 43 percent of their book value, according to documents obtained by the San Antonio Business Journal.

The notes ranged from near-worthless debts already written off by banks in San Antonio and South Texas before their failure, to new and current mortgages. They were grouped into 76 loan packages with book values ranging from $92 to $11.32 million, and sold to the highest qualifying bidder.

Forty-three different investor groups, mortgage companies, banks and pension funds acquired the 76 loan packages, with several groups making multiple purchases. But the largest purchaser of loans over the period was JMW Resources Inc., a Midland oil firm that paid just more than 10 percent of the loan value on its purchase. JMW …