(Mark Your Calendars: RealShare Distressed Assets May 3-4 in Dallas.)

The fourth time—or, in this case, fourth year—looks like the charm for investors hoping to acquire some of the billions of dollars in non-performing loans. While they’ve held out such hopes since 2009, when Ernst & Young began its Real Estate Nonperforming Loan Investor Survey, the volume of maturing commercial real estate debt has begun at last to spur banks to step up their efforts at getting the NPLs off their books, even as their profits have increased. That prompted investors to increase their allocations for buying distressed debt in 2011, and their success rate at buying the loans also increased, suggesting more price agreement.

In fact, in this election year, another figure of speech is apt: four more years. Or, more precisely, between two and four more years. That’s how long 82% of investors expect the NPL market to remain active, according to the 2012 edition of E&Y’s survey, released late last week.

“Nothing is certain in the distressed market, but the decisions banks make this year on whether or not to reduce their exposure in the commercial real estate debt arena will tell us a lot about how long the distressed market has to run, “ says Chris Seyfarth, a San Francisco-based partner with E&Y’s Transaction Real Estate practice, in a release. He notes that respondents to this year’s survey are aware of the impact the FDIC is having on the market, especially in view of the relatively high level of FDIC-designated “problem banks” and their potential for selling off both individual problem loans and NPL portfolios. That’s the case even though a fair number of lenders are still engaged in the policy of extend and pretend.

About half the dollar volume of the $1.5 trillion of CRE loans banks had on their books as the third quarter of 2011 was held by the 100 largest institutions, with the remaining $750 billion divided among the nation’s 7,345 smaller lenders—and smaller-balance loans for construction or acquisition and development. Among these local and regional banks, CRE exposure is greater: 26% of the balance sheet, compared to 7% for larger banks, E&Y says, citing FDIC data. Accordingly, respondents to this year’s survey ranked regional banks in first place as potential sellers of NPL portfolios this year.

“Starting this year, an estimated $800 billion to more than $1 trillion of commercial real estate loans will mature over the next five years, and analysts estimate that a third of the borrowers will be unable to pay off or refinance their loans,” according to E&Y’s report. This looming cloud of impending maturities could put even more NPLs on lenders’ balance sheets. “Furthermore, commercial property markets that saw strong growth at the beginning of 2011 began to weaken in the final months of the year.”

The majority of investors who acquired NPLs last year used leverage, although a smaller percentage than their counterparts in 2010—a change that E&Y says may be due to their meeting banks’ pricing expectations. Sixty-seven percent of NPL buyers in ’11 used financing, compared to 84% the prior year, according to the survey.

“Investors can use leverage to increase the return on an investment, and many do,” according to E&Y. “But they can also use leverage to pay a higher price for an NPL or other asset. To do so, however, they would keep their return level.” Among those who sought financing in ’11, about one-third aimed for leverage of 51%-60%, while only a few expected to need financing for more than 60% of the purchase price.

E&Y notes that domestic investors are also casting their NPL nets wider to find deals. Europe’s sovereign debt crisis has led to more banks on the Continent restructuring their balance sheets and considering the option of putting portfolios of distressed loans on the market. This chain of events hasn’t escaped the notice of larger US investors, although more generally only 28% of survey respondents said they’re interested in acquiring European NPLs.

To access the complete 2012 Real Estate Nonperforming Loan Investor Survey, click here.

(Visit the Distressed Assets page on GlobeSt.com.)