Easy - the bank is kicking the can down the road. To foreclose means to write it down in their books - which could easily put them over the edge in insolvency.
Pretending the loan is still performant allows them to keep playing the game a little longer.
Good post.
Most regional banks in the US are insolvent—since the true value (not the phony book value) of their commercial real estate loans would show total losses that exceed the banks’ total equity.
Bank balance sheets are total lies.