From the November issue: The new tax rules handed down by the Treasury Department in mid-September are prompting more lenders to employ already-popular “extend and pretend” and “delay and pray” strategies. These darkly comic catchphrases, of course, are used to describe the practice of extending the maturity on troubled loans rather than working out a deal that would reveal just how little the debt is now worth. Those who follow commercial real estate say the federal government’s new regulations — which were designed to help facilitate the modification process for troubled securitized loans — give loan servicers greater leeway to extend loans. Attorneys and advisors with experience working on troubled loans say they have seen a big increase in “extend and pretend” transactions this year across various asset classes. They forecast more such deals, thanks to two favorable trends — the new accounting rules and low interest rates. “Our view is that this condition [of rampant extensions] is going to continue for a while — the alternative is for lenders to decide they have to recognize losses,” said Paul Fried, managing director at advisory firm Traxi.
Lenders get more help with “extending and pretending” commercial mortgages
How long will banks be able to delay dealing with troubled loans?
New York /
Nov.November 03, 2009
09:30 AM
Related Articles
arrow_forward_ios

They said what now? Real estate quotes of the week

ChatGPT didn’t write this week’s real estate news roundup, we promise

Urban Standard wants to rescue property owners from high interest rates

Office properties (yes, office!) got Manhattan’s biggest December loans

Troubled Midtown rental saga headed for a foreclosure finale

Listen: Inside the looming distress across the hotel market

The bickering bros: Jemals escalate battle over portfolio
arrow_forward_ios