The US banking system is in very serious trouble. In fact, as an institution, American banking is probably broke. The reason is incompetent management of foreclosures. Two things have gone wrong. First, banks have carried foreclosed properties at unrealistic valuations. Second, millions of titles have been thrown into uncertainty by flawed foreclosure procedures and illegal foreclosures.
In fact, just as the original mortgages were worthless when bundled into securities because there was no way to determine their actual value, the foreclosed properties are worthless because there is no way to determine whether or not they have clear titles. So the inflated valuations cannot simply be lowered to more realistic levels. There is no realistic level.