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The acquisition of BankUnited by billionaire investor Wilbur Ross and a group of other private investors assumes that things will get worse for a while, Ross told CNBC Friday.
Bank regulators closed troubled Florida lender BankUnited Financial [BKUNA
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] Thursday, and the Federal Deposit Insurance Corp (FDIC) estimated that the failure will cost it $4.9 billion.
"We're assuming that things will get a lot worse and that's why there was the need for the $4.9 billion from the FDIC on top of our $900 million," Ross told "Squawk Box."
"We wouldn't be surprised to see a 10-15 percent drop" in Florida real estate prices, he added.
Other members of the consortium which bought the failed bank, besides Ross's WL Ross, include Carlyle Investment Management, Blackstone Capital Partners, and Centerbridge Capital Partners. The deal was reached after five months of negotiations, Ross said.
The bank's portfolio is heavy in very risky loans, the so-called option-adjustable-rate mortgages, where homeowners have the option of paying less than interest, Ross said.
"The loan gets bigger as the value of the house is shrinking and that's what put this company into bankruptcy," he added.
"There are very, very complicated loans to collect, a fairly large amount of them are to Latin Americans who don't live here, they have second homes or third homes," according to Ross.
"A few billion" of these mortgages, where they have to pay cash, are coming due "between now and 2010," Ross said.
BankUnited, which had $12.8 billion in assets and $8.6 billion in retail deposits, is the biggest bank failure so far this year.
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Data is a real-time snapshot *Data is delayed at least 15 minutes