THE hope in Washington is this: Banks that failed their so-called stress test will raise capital on their own — as many have already done — and then go about the business of giving loans to deserving businesses and homeowners.

But there are several obstacles, including the fact that the next big wave of loan defaults might be about to occur.

And the problem won’t be, according to a source, in credit cards.

Phillip F. Blumberg, chairman of Blumberg Capital Partners, thinks banks are really worried about the commercial real estate loans they issued during the orgasmic 2000s. That’s the reason, says Blumberg, banks are remaining conservative in their lending.

Credit cards may be bad but commercial real estate is worse.

“It’s absolutely frightening,” says Blumberg, who adds that he sold most of his real estate holders before the bust.

And the most dangerous time for banks will be 2010 to 2013 when $1 trillion in commercial real estate loans will mature and — like homeowners before them — owners of commercial properties will need to refinance.

Read the full article by John Crudele “Banks Worry about Next Wave of Loan Defaults” in the New York Post (May 19, 2009)

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