Vultures go hungry as banks extend loans
The Australian reports: A number of large vulture funds circling billions of dollars of distressed property could be shut down, as banks increasingly extend or modify loans for troubled borrowers rather than rushing to foreclose.
In the US, at least $US130bn of commercial mortgages are in default, foreclosure or bankruptcy, according a report released by US researcher Real Capital Analytics.
"Although the number of properties sold out of foreclosure is rising, relatively few troubled situations have been liquidated by the lender," RCA said.
Lenders had forced sales for mortgages totalling $US9.5bn this year, the report said.
"In the vast majority of troubled situations, a workout is still ongoing or the loan has simply been extended or modified and remains on the lender's books," RCA said.
The researcher estimated lenders had clawed back just under 60 per cent of the value of the loans after selling the assets, based on a sample of 145 defaulted commercial mortgages worth $US3.2bn.
On Thursday, The Australian reported the Future Fund had committed $US1bn to a new vulture fund started by giant fund manager Brookfield.
View the full article on The Australian: Vultures go hungry as banks extend loans
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