February 2010

by J. Craig Anderson

Arizona law professor Brent White says the only thing standing between many "underwater" homeowners and a better financial future is a misguided sense that walking away from a loan commitment is morally wrong.

White, an associate professor at University of Arizona's James E. Rogers College of Law, has spent the past few months presenting his argument to other lawyers, real-estate professionals and the national media.

No improvement is expected soon in the condition of commercial real estate in the U.S.

BY KEVIN G. HALL
khall@mcclatchydc.com
WASHINGTON -- Commercial real estate is expected to remain a drag on the U.S. economy through 2010 and beyond.

``You do see stress in the market. We've seen delinquency rates increasing; we've seen by a whole variety of measures increased stress in the commercial real estate market,'' said Jamie Woodwell, the vice president of commercial real estate research for the Mortgage Bankers Association.

Nancy Wentzler, chief economist and deputy comptroller in the Office of the Comptroller of the Currency (OCC), said that while banks started showing slight improvement in their balance sheets in 2009 compared to 2008, the recovery is fraught with risks and commercial real estate is still in the doldrums.

Wentzler was one of three featured speakers at the 2010 Economic Forecast on Wednesday, Jan. 20, at the University of Delaware.

“It has become clear to us through this process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives. We make this decision as we feel a battle over the property or a contested bankruptcy process is not in the long-term interest of the property, its residents, our partnership or the city.”