The Treasury Department and bank supervisors must undertake a coordinated effort to address a developing commercial real estate "crisis" that could be very damaging to the economy, according to a Congressional panel that oversees the government's Troubled Asset Relief Program.

Nearly half of the $1.4 billion in commercial real estate loans that need to be refinanced between 2010 and 2014 are under water and this could lead to a "significant wave of CRE defaults" and "prolong an already painful recession" the Congressional Oversight Panel (COP) says in a new 190-page report.

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