A Federal panel warns that continued weakness in commercial real estate portfolios may lead to a rash of bank failures. Small community banks out side of Central Ohio are getting clobbered by commercial real estate losses, Central Ohio's community lenders appear to be weathering the storm. A Feb 11 report from the Congressional Oversight Panel studying the financial services and banking bailout regulations predicted that a wave of commercial real estate loan defaults could harm the stability of many small banks over the next few years A study done by Columbus Business first using the government's calculations fournd that Central Ohio's community banks have for the most part stayed clear of the gorging on commercial real estate seen in other parts of the country. The CoCongressional Oversight panel estimates that 1.4 trillion of commercial real estate loans would reach the end of their terms between 2010 and 2014 and will need to be repaid or refinanced. With the the recent decline in prices, the panel found that NEARLY HALF of those commercial real estate borrowers are under water on their loans and could have trouble finding new financing.
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