Meltdown Far From Over, New Mortgage Crisis Looms

By: Associated Press
By: Associated Press

Analysts say the next economic crisis might involve malls, hotels and other businesses affected by the mortgage crunch.

Malls from Michigan to Georgia are entering foreclosure, victims of the same crisis that's affected the housing market. Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages. That pace is expected to quicken.

Experts at Fitch Ratings say the number of late payments and defaults will double, if not triple, by the end of next year.

Unlike homeowners making mortgage payments, 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 will be due next year, covering everything from office and condo complexes to hotels and malls.

Fitch says states with a high concentration of mortgages in the securities market are particularly vulnerable. Those include California, New York, Texas and Florida. Texas and Florida are already seeing increased delinquencies and defaults, as are Michigan, Tennessee and Georgia.

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