Now, as examiners are seeing more and more loans secured by real estate projects that are not performing as expected, they are looking for bankers to have realistic views and to have considered the effect a change in a project's performance has on the value of its collateral.
In some cases, an examiner may encourage a banker to obtain an updated valuation or appraisal of a project's supporting collateral. In view of the strains on bank deposits in the wake of last year's bank failures and the difficulty that many banks are having in raising capital, examiners will also be redoubling their efforts at assessing liquidity and capital planning.