S&L; Agency Plans Rescue Effort With Added Funds

The savings and loan bailout agency, bolstered by an additional $30 billion in taxpayer money, announced plans Monday to rescue 215 to 225 institutions--including several in California--and give away as many as 3,000 repossessed homes to nonprofit groups.

The agency, the Resolution Trust Corp., also announced a series of policy changes designed to speed the sale of real estate, loans, junk bonds and other assets inherited from failed thrifts. It set a goal of selling $65 billion of its $155 billion in assets during the next six months.

President Bush signed legislation Saturday earmarking $30 billion to cover losses in failed S&Ls; bailed out through Sept. 30. The trust corporation already had spent $50 billion. Earlier this month, it was forced to halt its cleanup while Congress debated measures authorizing more spending.

With enactment of the new legislation, the agency solicited bids Monday for 90 S&Ls; in 24 states, bringing to 97 the number available now. The remaining 98 will be advertised by June 30. Winning bidders are those that require the least government assistance.

Additionally, 20 to 30 now-solvent thrifts will be sold through the agency’s Accelerated Resolutions Program, in which regulators finance takeovers before the institutions are officially seized by the government.

In California, Santa Barbara Federal Savings & Loan will be the largest of the failed thrifts in the current group being put up for sale by the RTC. The Santa Barbara-based thrift has $4 billion in assets and $1.5 billion in deposits.

Others in California include Liberty Federal Savings Bank in Montebello, Rancho Bernardo Federal Savings Bank in San Diego and Pacific Coast Federal Savings in San Francisco.

In addition, the RTC said it will announce by June 30 information on the sale of such failed thrifts as Columbia Savings & Loan in Beverly Hills, Far West Savings & Loan in Newport Beach, Unity Federal Savings & Loan in Beverly Hills, Beach Federal Savings in Huntington Beach and Malibu Savings Bank in Costa Mesa.

“We’re going to try to clean up all the ones we have. Unfortunately, we’ll still end up with . . . new ones,” said L. William Seidman, chairman of the trust corporation.

The Office of Thrift Supervision expects at least 160 more S&Ls; will fail.

Seidman said the agency expected in May to announce its revenue requirements for the fiscal year starting Oct. 1.

“The only thing we can say for sure is we’ll need more,” he said.

As part of an effort to quickly unload 9,000 single-family homes, more than half of them in Texas, the trust corporation will hold 60 sealed-bid auctions.

If the agency cannot get an acceptable price, it will try to give the properties away to nonprofit organizations and state and local agencies that work to provide affordable homes to poor people.

“If they (the homes) have any value to us, we’re not going to give them away,” Seidman said. But, “we estimate there may be 2,000 to 3,000 homes that will not be economically viable for us to keep because the cost of maintaining them is more than we are likely to realize” from a sale.

The agency has already given away a handful of homes, but never on the scale expected in the new program.

In other initiatives designed to speed sales, the RTC:

* Hopes within a month to sell securities backed by home mortgage loans in its portfolio and later to sell securities backed by its junk bond holdings.

* Will offer deep discounts on real estate sooner than previously. The old policy had limited the agency to selling properties for not less than 20% below their appraised value, and only after nine months of trying to sell at higher prices. Now, agency representatives are authorized to offer as much as 20% off immediately and 40% after six months.

* Set prices on S&L; assets and sell them to any buyer meeting the price on the day an S&L; is rescued. Generally, the profitable banks and S&Ls; that acquire the branches and deposits of failed thrifts are not interested in managing the sour loans and repossessed real estate. So, in many cases, the trust corporation has been stuck with the assets long after the rescue is completed.

Seidman said his agency sold $128 billion in assets last year. It surpassed--by $3 billion--its $50-billion goal for its “great fall inventory clearance sale” during the last five months of 1990.

But he conceded that, for the most part, those were the easier-to-sell assets, such as performing loans and buildings with tenants. Now, the agency is getting down to more difficult assets and must adopt a more aggressive sales program.