The banks are selling off some of the toxic assets:

Banks Sell Bad Residential Project Debt, DebtX Says

Jan. 26 (Bloomberg) — Banks are selling troubled loans on land and residential construction debt at a faster pace as property prices plummet, according to Debt Exchange Inc. Chief Executive Officer Kingsley Greenland.

Banks and other sellers used the Boston-based company’s online marketplace to dispose of more than $1 billion of U.S. debt last quarter, triple the amount from a year earlier, including “hundreds of millions” of dollars of land loans and housing construction and development debt, Greenland said. Buyers pay at least 50 percent less than the face amount, he said.

“These are the toxic assets on banks’ balance sheets,” Greenland, whose company is known as DebtX, said in a telephone interview. “And there’s definitely a market for them. The price is another story.”