American Banker, September 28, 2022, Fed Proposes Permanent Extension Of Real Estate Debt Leniency
The Federal Reserve wants lenders to remain patient with commercial real estate borrowers that struggle to service their debts.
In a policy statement proposed this week, Fed staffers petitioned the Board of Governors to make a series of tweaks to its supervisory policies that would allow financial institutions to accommodate delinquent real estate borrowers and restructure troubled loans without being penalized. This leniency would be applied even when collateral values fall below loan balances — a phenomenon often referred to as being “underwater.”
