A New Wave of Loan Maturities Expected in 2012

Here We Go Again
– GlobeSt.com
GlobeSt.com interviewed Manatt’s Tom Muller, co-chair of the firm’s real estate and land us practice, for an article on why 2012 is expected to bring a new wave of defaults on commercial real estate loans.
 
Whether the lenders will be willing or able to refinance these loans is questionable because, as Muller pointed out, “Not only were those loans underwritten based on inflated bubble values, but many were also based on spectacularly optimistic underwriting standards popular at the time, which assumed steady upward economic trends.”
 
Nowadays, underwriting standards are substantially more conservative, noted Muller. He told the publication that many of the 2007 loans coming due—to the extent they haven’t already defaulted—will not come close to meeting current underwriting standards.