The delinquency rate on commercial mortgages held by banking organizations almost doubled over the course of 2007 to over two percent. The loan performance problems were the most striking for construction and land development loans – especially for those that finance residential development – but some increase in delinquency rates was also apparent for loans backed by nonfarm, nonresidential properties and multifamily properties.
Majority of the companies that went through insolvency proceedings under IBC and ended in liquidation so far were already stressed entities for a long time whose value had been eroded significantly and were pending before the Board for Industrial and Financial Reconstruction (BIFR).