Practice Of “Pretend and Extend” Could Stagnate Economy
NuWire Investor reports: “Pretend and Extend is a practice by lenders of extending a loan to de facto forbearing a default because they don’t want to deal with the problem,” Chris Grey, a managing partner with the Los Angeles-based real estate advisory firm Third Wave Partners, says. “This usually happens so that the lender can avoid writing down the loan or foreclosing and writing down the asset.”
The New York research firm Real Capital Analytics found that in late July, $93 billion in U.S. office, industrial, retail, and apartment real estate was in default, foreclosure, or bankruptcy, with the specter of troubled hotels and other commercial property types adding $31 billion or more to that total.
The RCA report found that less than one in ten distressed situations have been resolved – an indicator that Pretend and Extend may be taking a stronghold in the real estate world.
View the full article on NuWire Investor: Practice Of “Pretend and Extend” Could Stagnate Economy
Articles related to this topic:
ALM's Real Estate Media Group Launches Distressed Assets Investor
Posted by: Mark Alferman