Elizabeth Warren Warns of Major Commercial Real Estate Problems
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In an interview with the Fox Business Network, the chair of the Congressional TARP Panel, Elizabeth Warren warned that the commercial real estate situation has the potential to plunge the economy back into recession.
When talking about the threat that commercial real estate poses to the economy she said "it's like throwing a handful of sand into the gears on economic recovery."
According to Warren the commercial real estate market is coming dropping, already down 40 percent, and over the next few years as the mortgages, the community banks that issue them will feel the blowback.
"We're going to be seeing a lot of defaults, a lot of foreclosures, and it's not just going to be hitting the investors-it's going to hit the community banks," Warren said. "They become more and more cautious or have less and less money to be able to lend to small businesses, and that’s what creates a big problem here."
Warren was asked if another bailout was needed, and after a quick laugh and look of disgust, she emphasized that the community banks that are in trouble need to be examined and taken care of on a case-by-case basis to relieve the pressure before the situation blows up in the taxpayers face again.
"The last place I ever want to be is when the Secretary of Treasury rushes in to say give me $700 billion because the economy is on fire," Warren said.
When talking about the threat that commercial real estate poses to the economy she said "it's like throwing a handful of sand into the gears on economic recovery."
According to Warren the commercial real estate market is coming dropping, already down 40 percent, and over the next few years as the mortgages, the community banks that issue them will feel the blowback.
"We're going to be seeing a lot of defaults, a lot of foreclosures, and it's not just going to be hitting the investors-it's going to hit the community banks," Warren said. "They become more and more cautious or have less and less money to be able to lend to small businesses, and that’s what creates a big problem here."
Warren was asked if another bailout was needed, and after a quick laugh and look of disgust, she emphasized that the community banks that are in trouble need to be examined and taken care of on a case-by-case basis to relieve the pressure before the situation blows up in the taxpayers face again.
"The last place I ever want to be is when the Secretary of Treasury rushes in to say give me $700 billion because the economy is on fire," Warren said.
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