[tw8345]

Extend and pretend is the name of the game. If the lender triggers a default they will be stuck with the property and have to take the large balance sheet loss. Its generally better for them to pretend everything is fine until the property owner cant make the payment and even then its usually better to renegotiate than it is to take the hit. There isnt a clearing mechanism that would force the loss to occur and the property to resell at new market value.

Thats really the danger of low rates, it slows down market clearing forces and allows zombie companies to persist for a very long time.