Are banks like Goldman Sachs dealing with toxic loans or simply sweeping them under the proverbial carpet? As delinquency rates on commercial real estate loans persist and continue to rise dramatically, banking firms are granting extensions to these loans in hopes of at least delaying bankruptcy proceedings. While this may seem like an act of good will, in reality these same banks charge the borrower a fee for this service and occasionally a higher rate of interest must be agreed to. This scenario could be labeled as lets extend – wait - pretend and hope the current economic climate will improve significantly enough to avoid more massive foreclosures going forward.
It would appear that most in the financial world believe banks are merely delaying the inevitable by not dealing with these toxic troubled loans now as they present themselves. I say enough of the smoke and mirrors already.
