In its February oversight report, "Commercial Real Estate Losses and the Risk to Financial Stability," the Congressional Oversight Panel (COP) states that it is concerned that commercial real estate loan losses over the next four years could jeopardize the stability of many banks, particularly community banks, and prolong the recession.

According to COP, commercial real estate loans made over the last decade - totaling $1.4 trillion - will require refinancing in 2011 through 2014. Nearly half are at present "underwater," meaning the borrower owes more on the loan than the underlying property is worth. While these problems have no single cause, the loans most likely to fail are those made at the height of the real estate bubble. The Panel notes, however, "Even borrowers who own profitable properties may be unable to refinance their loans as they face tightened underwriting standards, increased demands for additional investment by borrowers, and restricted credit."

The full report can be found at the COP website.