Bank Regulators Urge Flexibility in Commercial Real-Estate Loan
Bank regulators are taking a page from their playbook of the 2008-09 financial crisis to help lenders weather the approaching tidal wave of troubled commercial real-estate loans.
For example, the policy states that in certain situations banks can modify loans without taking a loss even if the properties backing them are worth less than the debt.
Banks can work out loans in this way if borrowers have the willingness and ability to repay their debts, the policy states.
“There’s a ton of commercial real estate that was not priced for the rate outlook we have going forward,” said Jade Rahmani, an analyst with Keefe, Bruyette & Woods.
WSJ 24 July 2023
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