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More Hotels Facing Bankruptcy

I just read a report from the Mortgage Bankers Association showing that $171 billion worth of commercial/multifamily mortgages held by non-bank lenders and investors will mature this year. I then saw this USA TODAY story on how the hotel industry is bracing for more foreclosures and bankruptcies.

This paragraph, straight from the story, sums it up:

Until now, hotels have been spared from waves of foreclosures that have rocked the housing market. But that could change this year, says Los Angeles hotel attorney Jim Butler. "It's like a water balloon and someone forgot to turn off the water. But it hasn't burst yet."

We've already seen some resorts filing for bankruptcy and even shutting down and recent news that MGM-Mirage may default wasn't a surprise, considering what's going on in Las Vegas. Hopefully someone can shut off the water before this gets worse.

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