Following a year like 2010, I am hard pressed to make a prediction about exactly what will happen in the world of loan sales in 2011. After all, the best and brightest of our industry predicted that 2010 would bring a lot of trades, and through those sales would come the beginning of an end to the log-jam of loans in limbo. Instead, despite an uptick in marketing activity, especially in the last quarter of the year, and a deluge of offers to buy, many deals did not occur. All the bullish predictions last year couldn't budge the lethargic economic and lending environments. If you're looking at transactions, in a word, 2010 was flat.

However, when you look beyond transactions and focus instead on other types of activity that took place in the management of loan portfolios, 2010 was quite dynamic. It was the year when large commercial, regional and community banks all shook off the torpor and shock of 2008 and 2009 and began, in earnest, to take a cold, hard look at their portfolios and make action plans for their ongoing management.

Lenders entered 2010 with a hunger for information and a desire to make decisions and take the best course of action. Where answers had once been clear-cut, they had become hazy. In particular, loan portfolio values were difficult to nail down. The continued deterioration of commercial real estate and the difficulty of pricing for risk and forecasting future performance, all combined with a lack of transactions, made it tough to pinpoint loan values. It also made it challenging for banks to accept purchase offers with confidence that the offer was reasonable. Many companies that have well-seasoned veterans who review loans for potential acquisition have conveyed to us that they too have struggled to quantify all of the factors mentioned above and translate the results into a confident value.