SAN DIEGO-Many economic factors are making it harder to get a loan, and while the economy is seeing some recovery, “We’ve got a long way to go,” with many problems still plaguing the market, said Judy Hoffman, COO of Trigild, who moderated a panel on distressed debt at a recent CREW San Diego lunchtime program. Hoffman said the CMBS loan default rate is at 10%, the bank-loan default rate is at 3.5%, $1.5 trillion in commercial loans will mature between 2012 and 2017, and property values are down 35% from the height of the market, factors that slow recovery appreciably.

Panelist Debra Shannon, a SVP with California Bank & Trust, said there are several types of sellers in the market, and “it is important to understand what is motivating the seller so you can make the best deal with them.” However, she added that FDIC rules can stymie the process, since the agency would rather see problem debts worked out than sold.

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