Warren: Commercial Real Estate Is Sinking Fast

Tuesday, 06 Apr 2010 09:28 AM
By: Forrest Jones

About half of the country's commercial real estate mortgages will be "underwater" by the end of 2010, meaning the value of the assets will be less than what's owed on them, says Elizabeth Warren, a Harvard law professor and chairman of the Congressional Oversight Panel of the Troubled Asset Relief Program.

That's bad news for the economy and small and midsize banks, which will need up to three years to work out the problems, Warren says.

“We now have 2,988 banks — mostly midsize, that have these dangerous concentrations in commercial real estate lending,â€