Could you please explain why a lot of banks posted losses because of the collapse of real estate?

The banks are posting losses due to risky mortgage loans they had made in the past. Back in the 90's when the economy was accelerating banks and lending institutions decided they had nothing to worry about and began to give mortgage loans to people with fairly poor credit, possibly to people who have even defaulted(not sure since I haven't seen their books). Now those people are having problems paying their loans back and some just can't pay anything back at all. When the customer defaults on a mortgage the lending institution takes the hit from the loan they had given out. Now that the housing market is a meltdown the banks can't sell the houses they acquired through foreclosures, in part due to the credit crunch, which is another disaster.

The real estate crash effected banks profits because the people who too out loans for money beyond their means, too large for them to afford, couldnt pay off thier loans so the banks, instead of being paid for their loans, are being stuck with forclosed houses which will not turn much of a profit for them because loan agencies and banks are now being a lot more careful with the loans they give out which means less ppl can afford to buy houses and therefore the banks that are stuck with these forclosed houses cant sell them either at all of at a price where they make a profit.
hope this helps you

most banks invest in numerous sectors of the economy to ensure a diversified and more secure portfolio.

many sectors are interlinked

many banks give loans for property purchases. if people can not meet the loan commitments in terms of repayments, the bank is in trouble!

Banks made STUPID loans to people without good credit. Now they have to reposess the realestate involved and the dumping of tooooo much foreclosures on the market doesn't get them their full value-(money) back. Supply and demand I guess. Greeeeed also.

The losses are due to BAD Loans.

intelect said it all--would like to add all this money credit card companies hand out like candy-in turn cause so many to fall in financial trap not being able to pay mortgage