AP Warns That Crisis Looms in Commercial Mortgage Sector

The headline tells the story: “Meltdown far from over, new mortgage crisis looms” Yikes!

Here’s the synopsis: With the economy faltering, many commercial tenants, especially retail tenants, will fall behind on their rent payments. This will cause the building owners to fall behind on their mortgage payments in much-the-same manner many residential borrowers have been falling behind on theirs over the last 24 months. Defaults will increase, banks will foreclose, property values will decrease… To make matters worse banks are not willing to refinance properties with notes coming due. According to the AP story, it’s going to be bad, really bad.

We here at MasterPlan Capital are less pessimistic. Things are not looking good out-there, but the news media tends to be mellow-dramatic and over emphasize the negative. We are not Pollyannaish, we know the challenges are real, but we don’t fear boogie men and don’t subscribe to Chicken Little, “the sky is falling” scenarios either. We are still able to close and fund good quality commercial mortgage loans and opportunistic investors are still prowling for good deals.

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One Response to “AP Warns That Crisis Looms in Commercial Mortgage Sector”

  1. Schumacher Homes Says:

    I agree that the media is overplaying the gloom and doom of the mortgage situation. It’s not as bad as they make it seem, plus I think a turnaround is in order for 2009 anyway.

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