finance

FDIC announces new plans for commercial real estate workout guidelines

With so much bad news fluttering out in the CRE industry, especially when it comes to the financial markets, it’s always good to get a breath of fresh air.

CoStar reported a couple weeks ago that the government plans to unveil workout guidelines to encourage banks to restructure troubled commercial construction and mortgage loans. The Federal Deposit Insurance Corporation (FDIC) made those plans official on Oct. 30, 2009 by adopting a policy statement supporting “prudent” CRE loan workouts.

Under the new released policy, performing loans – including those that have been renewed or restructured on “reasonable modified terms” – will not be subject to adverse classification solely because of the declining value of the underlying collateral.