A Lot of Commercial Real Estate Mortgages Are Under Water

This is not a good thing. According to Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, half of all commercial real estate mortgages will be under water by the end of the year. This is a huge amount of many and I would not be surprised to see the a lot of the borrowers just walk away from these mortgages. A lot of these are speculators or large developers that know when to cut their losses. It's going to get ugly. What's more the bulk of these mortgages are held by mid sized banks and depending on how badly they are exposed means another raft of bank failures.