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A publication of
Winter issue 2016 sponsored by
CRE Finance World Winter 2016
13
Chart 8
Bank Construction and Development Real Estate Owned (REO)
Source: FDIC, Bank Call Reports, Chandan
In Billions
The rate of recidivism amongst delinquent borrowers is declining,
signaling further that many the headwinds facing banks are distinct
from those encountering the conduit. Where banks have modified
non-performing loans, their track record had been mixed but is
improving as the last vestiges of the crisis are wiped away. Lenders
are at risk of treating improvements in their legacy positions as
proxies for new loan quality. As they distance themselves further
from the crisis and competition intensifies, cyclical conservatism is
waning, introducing loans to the bank balance sheet that show a
clear move to renewed risk-taking.
Continued Slow Growth in Bank Construction Lending
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