lasted for months, the Federal Deposit Insurance Corp. is securitizing assets of banks that it has seized, including assets from Franklin Bank in Houston and construction lender Corus Bank in Chicago. There will be three deals coming to market in the near term, according to news accounts, with one--a $1.8 billion offering of residential mortgage backed securities--to be sold this week, according to Dow Jones Newswires.

The three deals will total $4 billion. The securitizations will be backed by an FDIC guarantee, according to Dow Jones. A call to FDIC was not returned in time for publication.

It is unclear what impact FDIC will have as it steps into the distressed market with these deals. Its primary mission, of course, is to get the best deal for taxpayers. The private sector, however, worries that FDIC may drive up distressed asset valuations--which have been perceived to be too high to begin to move. At the same time, however, FDIC could also introduce a welcome note of transparency into pricing with these deals.

"The FDIC has a lot of product, which is unfortunate for the system, but it's important to get really close to valuations that people will acknowledge as accurate," Patrick Sargent, a partner in the Dallas offices of Andrews Kurth LLP, and president of the Commercial Mortgage Securities Association, told GlobeSt.com in an earlier interview.

"We're seeing widely varying appraisal amounts," he said. "We've got to get 'price discovery' in order to find out where valuations really are. Once people are comfortable with that, there are many investors on the sidelines waiting for what they perceive to be the bottom and valuations that they can justify."

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