Even as a massive government intervention attempts to buttress teetering banks, several recent reports indicate a new crisis is looming that could further destabilize lenders and hamper rescue efforts.
More than $218 billion worth of loans for commercial and multifamily properties across the nation will mature over the next 12 months, according to a report released Monday by the Mortgage Bankers Association.
Many of the loans maturing will require developers to make lump payments of several millions of dollars.
With vacancy rates raising, the developers who used those loans to build office buildings and strip malls might struggle to pay off those mortgages.
If they can't pay and banks are unwilling to modify loan agreements, lenders could be faced with a large number of commercial loan defaults ---- in addition to the foreclosures on homes that have already sent the economy into the most painful recession in decades.
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