Unfortunately, Commercial real estate next bubble to burst, Congressional panel warns

We've all seen the turnaround in fears following the end of the current economic downturn. However experts, specifically the Congressional panel that monitors the U.S. financial system,
has warned that like the housing meltdown, the commercial sector could follow a similar path.

According to, $1.4 trillion in commercial real estate loans will expire soon. When that happens, of course, those loans will need to be financed, and with the situation with residential loans and the current attitude of banks which won't lend, this could spell disaster.

A lot of these commercial Real estate losses, are also due to the fact that these loans are for more than the properties are worth. Sound familiar? It's bad business when homeowners walk away from their obligations, but commercial real estate? The sound should send shivers down your spine.

The most scariest aspect of this problem, is that many of these commercial loans were funded by small and mid-sized community banks. Obviously, they do not have the same financial muscle as some of the larger banks.

Maybe the small business stimulus government money will prevent another disaster in the real estate industry. Only time will tell.

What do you think will happen if many of these loans were to default? Do you see any light at the end of the tunnel? What do you think can be done to avoid this potential disaster?...


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