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More Trouble Awaits Banks in 2010

More trouble awaits the banks holding commercial real estate loans in the year 2010 as there is no sign of recovery in the values of real estate in the next few months. The high percentage of underwater loans due through 2014 has forced banks to bring into existence several mortgage modification programs in order to avoid costly foreclosures.

Out of the $1.3 trillion of commercial loans outstanding as of Sept. 30, about $60.5 billion of them is found to be delinquent. The next four years will see the maturation of about $650 billion of mortgages, with over $150 billion maturing in 2010 only. Some observers say that the concerns of a credit meltdown is not justified while others believe that the real estate industry has to see a more hard-pressed time in the years to come.

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