Banks Get New Rules on Property

edited November 2009 in The Economy
From Wall Street Journal (http://online.wsj.com/article/SB125694507086819833.html):
Federal bank regulators issued guidelines allowing banks to keep loans on their books as "performing" even if the value of the underlying properties have fallen below the loan amount.

The guidelines refer to commercial real-estate. Now, it makes no sense to foreclose, since that would decrease the bank assets and require them to raise more capital. This is how banks are bailed out and we are all paying the price.

Comments

Sign In or Register to comment.