Real estate investors are scrambling one after the other in their haste to be the first in line when Chicago, Illinois-based lender Corus Bankshares Inc. decide to sell its bank owned forclosed properties and nonperforming loans.

The lending company has warned over the possibility that it will be put into receivership. Federal regulators have given Corus Bank until mid-June of this year to sell itself or generate a capital of about $390 million.

There is optimism in the real estate market that Corus Bank, with assets of $7.7 million, will be able to find a buyer or capital in time to meet the deadline set by federal regulators. However, industry analysts said that the bank’s chances of recovery are minimal given the current economic downturn and its financial condition.

Corus, a lender to luxury condominium towers across the country, has been severely affected by the economic downturn and the foreclosure crisis. Among the real estate segments, condominiums suffered the most in the current economic and foreclosures crisis.

According to Foresight Analytics, buyers were turning their backs from their down payments on condominium units, which left developers with more vacant, unprofitable buildings. Foresight data showed that delinquent condominium-construction mortgage reached 32.2 percent in the first three months of this year, an increase of 13.4 percent from the previous year.

The condominium crash has severely affected Corus because 75 percent of its commercial real estate mortgage is condominium construction loans. Out of the 85 condominium-construction loans under Corus’ portfolio, 41 were in default as of last quarter of 2008, while 23 were considered at risk of defaulting.

Last month, Corus filed foreclosure proceedings against 41 unsold units of Onyx on the Bay, a Miami, Florida-based condominium tower owned by Biscayne Bay Lofts. Biscayne defaulted on its construction mortgage with Corus after it failed to attract enough buyers to its 118- unit condominium tower.

The possibility that Corus will sell its bank forclosed and nonperforming loans has generated interest from various buyers, including individual investors, multi-family-rental operators and private-equity funds.
According to analysts, Corus’ loans are attractive to buyers because they were not divided or syndicated into securities. They added that Corus’ bank forclosed properties would not be subjected to litigation from other lenders.