The Bancorp: The Long Lasting Effect of an 'Extend and Pretend' Commercial Mortgage Operation

12 Pages Posted: 16 Feb 2017

Date Written: February 15, 2017

Abstract

Systemic problems with mortgage loan operations -- originations and modifications -- are flows which are capitalized into a long-dated assets or stocks. Correcting bad origination practices, or changing the flows, does not change the prior stocks created by the flows.

There were systemic problems with the origination and securitization of subprime residential mortgages a decade ago. The flawed origination process was stopped years ago, but the troubled loans still produce losses to this day.

This papers examine the continuing problems of The Bancorp, who discontinued a commercial loan operation in late 2014. Court document provide evidence that the bank sanctioned a practice "extend and pretend" loan modifications.

We provide estimates of future loan losses.

Suggested Citation

Abrams, Lawrence, The Bancorp: The Long Lasting Effect of an 'Extend and Pretend' Commercial Mortgage Operation (February 15, 2017). Available at SSRN: https://ssrn.com/abstract=2918454 or http://dx.doi.org/10.2139/ssrn.2918454

Lawrence Abrams (Contact Author)

Independent ( email )

PO Box 1285
Watsonville, CA 95077
United States
831-254-7325 (Phone)

HOME PAGE: http://nu-retail.com

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