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Extend-and-Pretend Drives Record Loan Modifications

Loan modifications surged to $35.5 billion amid rising defaults.

By Erik Sherman | January 29, 2025 at 06:58 AM

Long-standing predictions that many CRE loans would eventually get into trouble might be right. CRED iQ looked at data over the last three years across CMBS, SBLL, CRE CLO, and Freddie Mac loans.

There was “steep growth in modifications” over this period, with 2,778 loans at a total balance of $35.5 billion that were modified through a “lumpy pattern but consistent overall growth,” according to the findings. Filings varied from 52 properties in January 2022 at $584.1 billion in balances to only five properties ($157.5 million) in January 2023. December 2024 saw a higher number of loan modifications, comprising 347 loans and $1.1 billion in value. The highest loan value was in April 2024.

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