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A Friday night REO update at BankUnited…

As most footnoted regulars know, I have a soft-spot for Florida banks, probably because I spent several years early in my career chasing them down and know how dumb some of the folks who run these banks can be, especially when it comes to real estate. (Coast Financial, by the way, was acquired last summer for $3.40 a share — a significant drop from the $16 a share it had been trading at).

That’s why I decided to read the amended Q that BankUnited (BKUNA) filed late Friday pretty carefully. The explanatory note at the top promised to provide some additional details on “real estate owned”, which has been a big problem for BankUnited as well as lots of other banks and also some additional details on mortgage-backed securities, another big problem for many banks. Since it’s hard to believe that BankUnited would amend the filing on its own, you have to wonder whether an SEC comment letter prompted Friday’s fix.

Among the changes from the 10Q filed on May 12 is the addition of a chart on “unrealized losses in excess of 12 months” on mortgage-backed securities, which shows losses ranging from 1.2 percent to 14.6% — information that was not in the initial filing. Instead of the chart, the company provided a much sketchier paragraph that didn’t have nearly as many details.

On the REO front, BankUnited gave a dollar figure of $17.3 million for the 60 properties sold during the six months ended March 31, 2008. Compare that with the 20 properties sold for $4.5 million during the entire six year period ended Sept. 31, 2007, and you start to realize the scope of the problem. And, the numbers which show that the problems with REO appear to be getting worse, not better.

Indeed, the company warns in the filing that “These market conditions are likely to result in lower sales prices, longer marketing periods to sale, sell, or both, for future real estate owned activity, which could result in greater charge-offs at the time REO is acquired, and greater losses due to impairment of value during the period REO is held until disposal.” It’s the part in italics that was new in Friday’s filing.

Just another Friday night in SEC-filings land.