Law Office of Henry B. LaTorraca Civil Trial Attorney

Regulators say banks must manage CRE lending risks

Commercial real estate investors have had more access to funding in the past couple of years as banks have increased their lending and loosened their underwriting standards. However, all of this lending could expose banks in California and around the country to more risk, and banking regulators are worried. In July , the Office of the Comptroller of the Currency told banks to do a better job managing their risks in commercial real estate lending.

In an interview, Comptroller Thomas Curry said that banking regulators were flashing a yellow warning light for commercial real estate lending. The OCC warned banks to be vigilant about managing their risk in commercial real estate lending as lending practices like interest-only payment periods and longer loan maturities were creating dangerous conditions.

Large banks have increased their lending over the past couple of years. From 2014 to 2015, lending growth increased from 3.6 percent to 5.9 percent. Loan portfolios at small banks have also grown, and small banks are increasingly focused on commercial and residential real estate loans. According to the OCC, easier underwriting standards must be accompanied by risk management planning. Curry said that he believes that if banks act now, potential risks can be mitigated.

A commercial real estate investor may be able to get better loan terms with representation from an attorney. An attorney may also be able to represent the investor during the purchase process. If there are any title disputes, construction litigation issues or problems with the zoning of a property, an attorney may be able to help a real estate investor to settle these conflicts outside of court.

No Comments

Leave a comment
Comment Information

Creative Solutions for Complex Legal Issues

Map email us for a response

Contact the Law Office of Henry B. LaTorraca

Prospective clients are invited to contact attorney LaTorraca at 562-216-2942 for an initial lawyer consultation to discuss their legal matter.

*AV Preeminent is a certification mark of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the Bar and the judiciary. Martindale-Hubbell ratings fall into two categories - legal ability and general ethical standards.

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Follow Henry B. LaTorraca Via Social Media

400 Oceangate Suite 700 Long Beach, CA 90802-4306 Phone: 562-216-2942 Fax: 562-216-2943 Map & Directions

facebook google plus LinkedIn directions