I needed to re-check the date on yesterdays Wall Street Journal article on lenders "Extending and pretending" The article isn't wrong - deferring maturity dates and rolling existing loans has been an important tactic for many lenders - the timing is off. Many lenders have been implementing some form of this strategy for almost two years and I believe the tide is actually starting to shift the other way. There are at least three factors that play a role:
1) Improved values make recovery rates more certain if a lender takes a property back.
2) The widespread acquisitions of special servicers may signal a shift in operations for the securitized segment of the market.
3) Improved bank balance sheets allow more lender flexibility in dealing with distressed loans.