Half of Commercial Mortgages to Be Underwater

Discussion in 'Free Speech Alley' started by Sourdoughman, Apr 3, 2010.

  1. Sourdoughman

    Sourdoughman TigerFan of LSU and the Tigerman

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    By the end of 2010, about half of all commercial real estate mortgages will be underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, in a wide-ranging interview on Monday.
     
  2. LaSalleAve

    LaSalleAve when in doubt, mumble

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    I like Elizabeth Warren. She seems like an honest person.
     
  3. mobius481

    mobius481 Registered Member

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    There are two options. Realize the losses now and take another massive hit to our already shaky financial system or continue to "pretend and extend". I don't fully understand the ramifications of pretend and extend but it probably just spreads the issues out over the next five or more years.
     
  4. LaSalleAve

    LaSalleAve when in doubt, mumble

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    "pretend and extend" seems like taking methadone to get rid of your heroin addiction, you aren't really fixing anything, you are just delaying the inevitable.
     
  5. mobius481

    mobius481 Registered Member

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    Kind of, but there's also principal paydown that goes along with that. So instead of a developer/owner having 75% in debt after 5 years, they may have 100%. Sounds bad, but not when you compare it to the 110% they have now. Pretend and extend helps the banks, but will hurt construction and growth moving forward as there is no way to refinance and get money for new projects.
     

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