Tuesday, November 17, 2009

Commercial Real Estate Encouraging News

Commercial real estate owners got some encouraging news recently. Economic reports showed promising signs, and the FDIC made clear how it is looking at commercial real estate loans sitting on the books of banks. Their 33-page policy statement is aimed at easing concerns over souring commercial real estate loans sitting on banks' books. The best news may be for borrowers and banks struggling with a matured loan in which the borrower is strong and the collateral has sustained a loss in value or tenants, but there's good and sufficient cash flow to cover debt service. In that case, the FDIC allows the bank to continue to carry the debt without a negative classification, even though the loan-to-value could be more than 100 percent. Read more...

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