Many real estate market participants have criticized lenders for failing to foreclose on problem loans. Allowing property owners to fall behind on payments, or reduce payments, because the lender was already overwhelmed with problem loans became knows as "extend and pretend." The practice of ignoring the problem seems to be coming to an end however.
A year ago lenders had 80% of problem loans in loan modification programs. In an about face lenders are now foreclosing on approximately 71% of these loans and modifying only 29%. According to Moody's, approximately 7,000 commercial mortgage backed securities loans were in some form of default at the end of 2010.
A year ago lenders had 80% of problem loans in loan modification programs. In an about face lenders are now foreclosing on approximately 71% of these loans and modifying only 29%. According to Moody's, approximately 7,000 commercial mortgage backed securities loans were in some form of default at the end of 2010.
