Resolution Trust Corporation:

Real Estate Recoveries 1993

GGD-94-84FS: Published: Mar 25, 1994. Publicly Released: Apr 12, 1994.

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GAO provided information on the Resolution Trust Corporation's (RTC) efforts to recover assets from failed savings and loans, focusing on its: (1) overall estimated recovery rates; and (2) actual real estate recoveries.

GAO found that: (1) between 1991 and 1992, RTC overall recovery rates for its financial and real estate assets declined 9 cents per dollar of book value; (2) significant economic uncertainties still exist that could affect the value of assets in resolved and unresolved institutions; (3) although economic conditions have improved RTC receiverships, it is difficult to predict the recovery rates and timing of sales because the remaining assets are considered hard to sell; (4) between 1992 and 1993, cumulative real estate sales and net proceeds decreased from the previous year, actual recovery rates increased 4 percent, and the cumulative recovery rate remained constant; (5) as of 1993, the average recovery rates from the sales of single-family property declined; (6) the average recovery rates for real estate assets sold in receiverships were lower than for assets sold in conservatorships; (7) in 1993, the difference between real estate sales prices and their appraised values increased with the age of the appraisal; and (8) although RTC reported that its cumulative closing costs decreased by 1 percent between 1991 and 1993, its closing costs may be unrealistic because its reporting system does not include all of RTC selling costs.

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