Can you feel sorry for banks, after they had a large influence in the foreclosure crisis a few years ago? Revealed recently, many banks pushed foreclosure filings forward without having proper documentation or receiving sufficient signatures. In fact, many whose homes had ended up in foreclosure might not have needed to go that far. But an article from a month ago in Bloomberg mentions that real estate loans have caused banks to have large quarterly losses. Should anyone be surprised?

Banks’ loaning practices have already gone through heavy reform, and getting a loan is far more difficult in the present than in 2005. Nevertheless, as the Bloomberg piece details, bank stocks saw notable drops this past quarter, with Regions Financial Corp., based in Alabama, being one of them. Regions Financial has not turned in an annual profit since 2007, and their shares fell 45 cents last quarter. Although the cause isn’t delved into, the author mentions that an increase in charge-offs from uncollectable loans, such as bad commercial real estate loans, might have spurred this drop. A takeover of the bank chain, which has already closed several branches, seems inevitable:

The mounting losses have made Regions the subject of takeover speculation, with Credit Suisse Group AG saying in a September report that the company is the biggest U.S. bank most likely to become a target of Canadian, Spanish or larger U.S. banks as industry consolidation accelerates.

Larger banks have halted foreclosures recently, and this action simply symbolizes the approach in the present to real estate loans. Instead of the swiftness to file foreclosure paperwork three years ago, banks need to wait, and the result of this may be a drop in profits that were once higher before the real estate crisis hit.

While the average price per home has dropped and sales have stalled, Florida appears as if its real estate market could recover, according to a recent press release by Cotton & Company released on Business Wire. Compared to other markets around the country, Florida has one clear advantage: “trophy” and “oceanfront” properties that attract foreign investors. At the moment, it appears as if investors from South America and Canada, as mentioned in the press release, may help Florida recover, and we’ve also seen, on this blog, an influence from Europe.

Cotton & Company predicts a 10-year rebound for local prices, which is reasonable. Considering the steep climb in prices between the late 1990s and 2006, getting back to that level at a reasonable pace, and with ethical lending and real estate practices employed, will take time.

As we had seen last year, oceanfront communities like Destin had shifted to renting in real estate – buying simply wasn’t common. Because of this, fewer new properties were built for sale, including both commercial and residential real estate, but agents renting to vacationers instead expanded the amount of properties offered to those staying in the area for a few days.

Vacationing is a significant industry in Florida, and while more notable beaches will attract those from overseas, other areas, such as the Gulf Coast, have turned into staycation destinations, which have changed the local economy. Attracted to the white sands and clear green waters of the Gulf, vacationers from areas within driving distance will rent a home for a few days to a week.

But vacationers, however, rarely buy, and while an increasing tourism industry brings in more jobs and more money locally, it keeps commercial and residential real estate stagnant. How foreign investors choose to buy up Florida properties may change the pace of local real estate, however.

Is the real estate market improving? That depends upon who you ask. When tax credits for first-time homebuyers were still available in the first half of 2010, the amount of sales appeared to be increasing, even though the average price for a property was still much lower than in 2007. But the amount of sales only gives part of a picture of the market in the present. From the perspective of agents, the prices are still at the bottom, and considering sales have hit a plateau for the last few months, the market may simply be stagnant.

With the average price of a home now being less than $200,000, getting to pre-2007 levels may take another five to 10 years. According to UPI.com, home prices still have not reached the bottom, as amounts for the third quarter in 2010 fell slightly lower. As the article explains, the average price on a home in August dropped 1.5 percent over the last year. Since April 2006, prices have decreased 28.6 percent.

The UPI.com piece predicts that prices should stabilize in the second half of 2011. In the present, 35 percent of sales are still “distressed” properties – foreclosures and short sales – that aren’t always factored into the average price per home.

But although the UPI.com piece predicts an increase, another from NJ.com predicts a six-percent decrease. The NJ.com article mentions that although the tax credits from 2009 to mid-2010 helped the market reach a temporary consistency, they were enough to keep real estate stable. Rather, other factors will contribute to a lack of real estate recovery:

“We’re just not able to create jobs yet, so this huge supply of housing is going to stay for a while,” [Jeffrey] Otteau said. And at those inventory levels, prices typically drop by about one percent a month, he said.