RTC

See Resolution Trust Corporation.

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Resolution Trust Corporation (RTC)

A corporation that no longer exists,but had a major impact on U.S. real estate markets. The RTC was formed in the wake of the banking and thrift crisis and bailouts of the mid to late 1980s.As lending institutions were declared insolvent and closed by their various regulatory agencies,the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC,pronounced “fizz-lick”) arranged for payments to depositors and then took over the assets of the failed institutions.The assets could include performing and nonperforming loans, real estate, vehicles, equipment, furniture, and often rare and expensive artwork and accessories.The task of managing and liquidating the assets proved too much, so the government created the RTC to take over those functions.The mandate of the RTC was to liquidate assets, including real estate,as quickly as possible,even if a higher price might be obtained by holding the assets and managing sales over a longer period of time.Billions of dollars of real estate came into the hands of the RTC.The real estate was then sold,often for pennies on the dollar,and as a result many real estate markets were seriously depressed and took years to recover.