Up in 3rd qtr. -down 40% since 07. CRE is a time bomb!!

Navarre:

Note the 9% delinquency for CRE:

As a result, Federal Reserve examiners are reporting a sharp deterioration in the credit performance of loans in banks’ portfolios and loans in commercial mortgage-backed securities (CMBS). At the end of the second quarter of 2009, approximately $3.5 trillion of outstanding debt was associated with CRE, including loans for multifamily housing developments. Of this, $1.7 trillion was held on the books of banks and thrifts, and an additional $900 billion represented collateral for CMBS, with other investors holding the remaining balance of $900 billion. Also at the end of the second quarter, about 9 percent of CRE loans in bank portfolios were considered delinquent, almost double the level of a year earlier. Loan performance problems were the most striking for construction and development loans, especially for those that financed residential development. More than 16 percent of all construction and development loans were considered delinquent at the end of the second quarter.

CRE and Construction Development loans is where the shoe will drop!!

Note the decline in both healthy and distressed CRE, end result will be and explosion in delinquencies and foreclosures!!

See Graph

http://3.bp.blogspot.com/_pMscxxELHEg/Su...

Great website:

http://www.calculatedriskblog.com/search...