Sunday, February 28, 2010

The Looming Commercial Mortgage Debt Crisis

With California, New York, and some of the other large states on the verge of default, a problem with commercial property debt may push them that much closer to the brink.

See: Commercial Mortgage Default Rate in U.S. More Than Doubles

The default rate for commercial property mortgages held by U.S. banks more than doubled in the fourth quarter and may reach a peak of 5.4 percent at the end of next year, according to Real Capital Analytics Inc.

We may have rough seas ahead of us.

The timing of the midterm elections will make all of this that much more interesting.

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