Sales Not Keeping Pace With Delinquent CRE Borrowers

Distressed Loans Trickling Onto the Market
– Daily Journal
The Daily Journal interviewed Manatt’s Tom Muller for an article on why attorneys are anticipating that as commercial loan losses rise, the wave of mortgage transactions will swell.
 
The publication reports that, even as regulators increase the pressure on lenders to clean up their balance sheets and reduce the amount of commercial real estate loans in their portfolios, the flow of foreclosed assets into the marketplace is likely to be a trickle and not a flood. Adding too many foreclosed properties onto the market will further depress prices for commercial real estate just as foreclosed homes have done in the housing market.  
 
"In order to not kill off the banks in big numbers, regulators have both expressly and implicitly let them hold on to loans," said Muller. "They can restructure even if the value of the property is less than the loan."