It seems that commercial real estate mortgages held on the books of local banks are finally getting the attention they deserve. After several months of both media and government attention on commercial mortgage backed securities, both the FDIC and the media are finally focusing on local banks as well. In an article in Business Week, they focused on the tremendous amount of commercial mortgages held by local banks and the dangers that this poses.  It appears that the FDIC guidelines that were recently released were intended to address this issue; however, it seems that the banks have been very slow to familiarize themselves with the document. Many banks that I have spoken to this week were either unaware of these new guidelines or had yet to review them.
I would hope that once the banks have time to review and implement these guidelines, the process for obtaining a commercial loan modification will be more efficient and streamlined. It appears that this was the intent of the FDIC and will be to the benefit of both banks and borrowers. At the end of the day there will undoubtedly be many loans that are beyond repair and foreclosures on commercial properties will be inevitable, but these guidelines should be able to slow down the bleeding.