Banking industry: commercial credit: will these aftershocks collapse the American economy?
In the easy credit days of 2005 and 2006 business loans were typically made on five, seven and thirty year notes.
The 5 yr. notes created in 2005, come due in 2010 – but typically they will not be able to refinance and are presently at risk of foreclosure if they cannot sell the property to pay of the note.
The 5 yr. notes created in 2006, come due in 2011 – but it is unlikely they will be able to refinance and will be at risk of foreclosure if they cannot sell the property to pay of the note.
The 7 yr. notes created in 2005, come due in 2012 – but, unless a dramatic economic recovery occurs in 2010 and 2011, they will not be able to refinance or sell either.
The 7 yr. notes created in 2006, come due in 2013 – but, unless a dramatic economic recovery occurs in 2010 and 2011 and 2012, they will not be able to refinance or sell either.
Nor do I believe that the US gov’t can keep funding bail-outs,
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One comment
Gem on February 9, 2010 at 11:49 pm
Yes this is a HUGE problem.
The banks were also offering ARMs and liar loans in ’05/’06 that are resetting. Heck, FHA is still selling nearly zero down loans.
Last year banks closed down thousands of open business credit lines for no reason, payments were being made.
This year they have been told by the FDIC to CUT business loans even more.
Those loans and businesses are EMPLOYERS.
We are no where near the "bottom" of this mess.
Pray it doesn’t end in anarchy.