Industry NewsMarkets & Economy

Extend and pretend: A good idea?

From The Real Deal
Published on Dec 28, 2010

Editor's note: This article is reposted with permission by The Real Deal. View the original article. By SARABETH SANDERS NEW YORK -- We're programmed to believe that lying is bad; telling the truth is good. So two years ago, when the economy was in a tailspin and lenders started employing a strategy disparagingly dubbed "extend and pretend" for struggling commercial property loans, it's no wonder they got a bad rap. Critics painted the banks as liars who were doing little more than kicking the can down the road when they gave borrowers extra time to pay their due. By refusing to write down underwater mortgages, they said, banks were only delaying their inevitable losses and masking the true extent of the crisis. But last month, Moody's reported that U.S. commercial property prices rose 4.3 percent in September -- the largest month-over-month gain in a decade. And as The Real Deal reported, the New York City commercial property sales market has...

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