New U.S. mortgage crisis looms (commercial property)

[Newsjock]

Source: Associated Press

WASHINGTON — The full scope of the U.S. housing meltdown isn't clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts across the country.

Even as the holiday shopping season begins in full swing, the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

... Unlike home mortgages, businesses don't pay their loans over 30 years. Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end. About $20-billion (U.S.) will be due next year, covering everything from office and condo complexes to hotels and malls.

Read more: http://www.reportonbusiness.com/servlet/story/RTGAM.20081127.wcommercial1127/BNStory/Business/home

[msongs]

1. perhaps the "homeless" could live in the empty malls. must be a use for these malls nt

[Joe Chi Minh]

2. Sounds a terrific idea.

[ksimons]

5. someone already bought www.mallsforthehomeless.com

ok, I kid... but good idea

[HooptieWagon]

3. BayWalk, in St Petersburg, FL, was just foreclosed on.

[Roland99]

4. That and the hedge fund collapse were some of the last steps Roubini predicted.

we haven't seen the worst yet.

[burf]

6. The one part of the article

that really struck me was: The U.S. Securities and Exchange Commission is considering another option that might ease the crisis, one that would change accounting rules so banks don't have to declare huge losses whenever the market declines.

So, if there is a loss, don't worry, be happy, because its not going to be reported. Everyone knows that if you don't report a loss, obviously there wasn't one! Looks like just more smoke and mirrors to me. But what do I know?

[w4rma]

7. I'm really sick of these financial companies, their funny money and their usury rates.

They are the ones that should be shutting their doors. They are the ones that created and own these worthless fraudulent derivatives, not the regular businesses that actually do things.

[Turbineguy]

8. $20 million

let's see. Do the standard 100:1 leverage that's 2 trillion.

Then do the five-fold reduction in value: that's $10 trillion.

Or we could just cover the part that's in default, probably $2 billion or so.

Nah, too easy.

[Neshanic]

9. This is so gargantuan. Now it's finally getting the light and it's not pretty.

[bluesmail]

10. This bears repeating: Thanks Dick. Thanks George.

If you've (DU) read this far, Heckuvajob.

[Joanne98]

11. There are credit default swaps on that too.

[wellst0nev0ter]

12. Those Damn Minorities And Their Commercial Properties They Can't Afford

Oh, wait . . .

[Mojorabbit]

13. This is going to take

a decade or more to recover from before it is all done.

[pattmarty]

14. It's Bill Clinton & the Dems fault for lending money to........

.......all those poor (white) business people who they knew couldn't pay the mortgage on those shopping malls and big Hotels.

[Baby Snooks]

15. $20 billion?

It is probably much more than just $20 billion. We were lied to in the beginning about the residential mortage crisis. We are being lied to about this. As this administration pours trillions of dollars down a toilet. While Congress sits by and does nothing.

As for Fannie Mae and Freddie Mac, it's business as usual. Got reasonably good credit? Your friendly neighborhood realtor has a house to sell you. Foreclosed on and still overpriced of course. But what the hell. Keeps up the appearance that everything is just fine. For the realtors. And the mortgage lenders. And here we go again.

Our entire economic system is insolvent at this point. Unless you listen to the "neo-con artists" which unfortunately Barack Obama is.

Let the banks collapse. At least the taxpayers will only have to cover their own deposits rather than their own deposits and the trillions of dollars of debt created by the crooks. Sell the assets to whoever wants them and to hell with the investors. They will lose everything in the end anyway. Start over. Sooner is going to be less painful, and less expensive, than later.

And regulate the hedge funds. They are making hundreds of millions every day betting on this or that company in this or that sector collapsing and then being rescued by the taxpayers. The American people are not a roulette wheel any more than they are an ATM machine.

Don't think so? Look at the price of oil and think back several months ago. A devalued dollar and increased demand with dwindling supply was not the reason we saw $140 a barrel oil. It was the traders. The hedge funds. Making money off everyone's misery.

And how much did Chelsea Clinton make? Not only for herself but her parents? Let's really start talking about financial disclosures.

People need to finally wake up. Before it really is too late.

[DogPoundPup]

16. New U.S. mortgage crisis looms

Source: Globe and Mail

WASHINGTON — The full scope of the U.S. housing meltdown isn't clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts across the country.

Even as the holiday shopping season begins in full swing, the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

Read more: http://www.reportonbusiness.com/servlet/story/RTGAM.20081127.wcommercial1127/BNStory/Business/home

[sakabatou]

17. It's not a river of shit.

It's a whole fucking ocean! GAH, how much deeper does it get?

[SoCalDem]

18. here's a grahic representation

[whistle]

21. Four quadrillion dollars in derivatives and the American tax payer is signing on to

...the entire debt backed commitment without any end in sight

[indepat]

23. It's enough to make one wonder is Uncle Sam has the resources to meet all its

obligations, if a barrel full of dollars will buy even a loaf of bread down the road. :P

[SpiralHawk]

24. Taxpayers are 'being signed on' - they are not signing themselves on.

Republicon mind and wallet f*ck

[Javaman]

22. I prefer the term, "basking under a waterfall of shit", personally. nt

[whistle]

19. Hank Paulson is making sure that happens

[tomreedtoon]

20. But weren't these buildings asking for it?

This will probably get me flamed, but there are a lot of bad things about these commercial buildings.

Have you ever walked in a shopping mall? Not just during the current crisis, but a few years before? There are ugly, "artistic" structures taking up horrid amounts of mall space. The stores themselves are awkward, small, overpriced areas that are difficult to sell anything in. (There's no inventory or storage space behind the gaudy walls of those retail spaces.)

The stores are superficial, offering "style" instead of value. Unlike department stores of earlier decades, where at least there were classic economy clothing, everything is superficial and designed to be pitched at the end of the current season. The clothing itself is shoddy and awkward, designed for anorexic heroin-snorting models instead of real women or men.

And the food courts are the same way. Would you eat any of the badly-made Chinese, "Cajun" or "green" cuisine if you were looking for a place to eat out in the real world?

Say what you will about the ugliness of roadside strip malls, at least they are practical places to house a business. Malls require a level of pretense you only find in the rich, powerful and hallucinatory. The whole idea of the modern shopping mall is to make us all mindless Republicans.

Hotels? One of the big hotels in downtown Atlanta is built like Mad Ludwig's Castle...a lot of fun during a science fiction con like Dragon*Con, but in reality ugly and hard to navigate - and many locations are impossible for the handicapped to get through. Stairwells to nowhere, elevators at the end of stairwells, balconies and acrophobia-inducing landings...a reminder that architects are fascists who want to abuse the people who dare sully their perfect buildings.

I would rather see these places demolished, their owners forced to live in the same cardboard boxes we'll all be living in at the end of next year, and the kind of beehive poverty apartments I saw in New York built in their place. They would be ugly, but they would be places for human beings to live and thrive. And those tenements wouldn't be designed by architects, a very positive development.

[NashVegas]

26. The Aesthetics Are Irrelevant for This Exercise

Their owners will not be living in cardboard boxes. Those in the club understand the necessity of interdependence and will help each other stay above the shit.

[nashville_brook]

27. i work in commercial real estate -- marketing -- and can tell you YES, they "asked" for it.

and it's not just malls. it's condo towers, office towers and strip malls. they asked for it in a million ways -- not just in bad design, but in bad planning and bad financing and bad management. here in Florida -- miami in particular, there are dozens of EMPTY, bankrupt office/condo towers lining downtown. they are monuments to massive FRAUD -- so, it's worse than simple bad design/planning/financing/managment. these monstrosities were the lever used to pry gazillions of dollars out of the economy, and the fact that no one can get financing for them is eclipsed by the fact that no one wants them, because without the promise of ill-gotten millions in contractors' fees, investment dollars and crooked financing, there's absolutely no reason to own one.

i'm hoping for a great cleansing. i'm hoping for affordable housing and walking neighborhoods as well as investment in mass transit/light rail, to makes these areas viable again. judging by what IS SELLING now, and what's being pushed for the future of these areas, there's hope. money is having to get smarter to be productive and this is a good thing -- but we're going to see a miserable time in between now and any sort of renaissance.

[Ian David]

25. Where I live, these abandoned storefronts usually become evangelical churches.

They occupy vital downtown real estate while not paying taxes.

[TankLV]

28. So - will they kick the businesses out quickly like they do the poor home-owners and renters?

I bet they'll show extra-special "concern" for them, tought shit for home-owners and renters...