(…) look at where commercial real estate lies in the banking sector.
Regulators appear to be hoping that a partial recovery in commercial real-estate values could reduce the problem. They recently issued guidelines that make it easier to keep underwater loans out of bad-loan tallies, as well as encourage banks to restructure, rather than foreclose on, problem commercial mortgages. Indeed, Foresight estimates that for commercial real-estate bank loans maturing between 2010 and 2014, a 10% rise in values could cut the proportion underwater from 68% to 37%.(…)
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