Question-and-Answer Session
Operator
Thank you. At this time I would like to remind everyone if you would like to pose a question at this time, please press "*" then the number "1" on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Our first question is coming from Dave Rochester from FBR.
Dave Rochester - FBR
Hey, good morning guys or good afternoon.
Kevin McCarthy - President and Chief Executive Officer
Hi David.
Dave Rochester - FBR
Just real quick on the NPA increases. Could you provide a little bit of color on the -- in terms of the residential construction NPAs location, LTV range and the general financial position of those borrowers?
Greg Standlea - Chief Lending Officer
Sure. The loan value ratio on the NPAs ranges anywhere from 80% to 148% in some cases. The overall LTV is around -- we estimate it currently around 87%, based on the appraisals we have in hand. The financial situation of the borrowers is in many cases stressed because they have a number of relationships outside of the bank that -- in other words, that are highly leveraged in construction lending. And we are one of many that they are trying to put resources towards. And they are very dependent upon obviously real estate -- the new home sales in order to generate cash flow to their businesses. So their positions, their financial positions have deteriorated substantially over the last year and especially in the last six months.
What was the next part of your question?
Dave Rochester - FBR
That pretty much took care of that one. I guess you talked about the acceleration absorption rates from half a home to 1.5, I guess. And so it sounds like even that increase is not really putting a dent in their issues. Assuming that we are staying at this level over the next year would you anticipate having perhaps more material losses on those loans?
Greg Standlea - Chief Lending Officer
Yes the absorption rates they need to get to perform at the current -- at the level that we made the loan is probably around 4 as an average per month. And so we have a ways to go to get to that level. We think when we get to 2 to 3 that we are pretty much protected on the loan part.
So depending on how absorptions continue, in the low desert area, we are entering the height of the season. So that should pick up the rest of market seasonally would not show a huge increase in absorption and we are going countercyclical to that right now though.
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