EXTENDING AND PRETENDING IS ENDING

Last time we talked to Dykema's Mike Kurtzon (right) in April 2010, he was mired in a flood of workouts. This year, he and Dykema's Jerry Peven tell us banks are finally trying to get bad debt off of their books (bad debt always crinkles the pages) through short sales, note sales, auctions, and foreclosure. Mike, Jerry, and a team of more than 20 other Dykema attorneys recently represented a  private investment fund that participated in an auction sale of 42 nonperforming securitized loans secured by multiple real estate types located in the greater Las Vegas area for a special servicer. Cities like Vegas, Phoenix, and Miami that were hit  particularly hard by condo overbuilding are now getting back on track as lenders seek to dispose of these assets and want to lend again, Mike says.
Jerry, who works mostly with special servicers, says that with multifamily housing as a hot commodity right now, many life companies, banks, and equity funds want to get their money into a performing asset. Consequently, they are willing to sell notes or properties at a discount. There are also lenders and buyers with an appetite for discounted notes (as a means to eventually acquiring a property) and discounted properties themselves. Jerry and Mike believe there is plenty of money sitting on the sidelines but say it's too soon to tell how  long or stable the recovery will be.

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