Watchdogs Warn of New Wave of CRE Defaults

A special congressional panel's newly released report is sending shock waves throughout the commercial real estate industry, not to mention causing consternation among many community bankers. It is also generating an abundance of headlines.

The message from the Congressional Oversight Panel, which is charged with reviewing the government's $700 billion bailout program, is not exactly surprising: HousingWatch and other sites have been reporting on the plight of the commercial real estate sector for some time now. But what is disconcerting to some is the strength of the language used to describe the problem and the bleak prognosis: "A significant wave of commercial mortgage defaults" could create a downward spiral that "would trigger economic damage that could touch the lives of nearly every American," warns the panel.