By the fourth quarter, commercial mortgage defaults from bankscould soar past levels not seen in nearly 20 years, according tothe FDIC.

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Scant refinancing will drive the default rate, which isprojected to be at 4.1% by the end of year. Real EstateEconometrics, a property tracking research firm, said theprojection is tied to nearly $44.3 billion of commercial mortgagesbased on the $1.08 trillion of the loans held by banks in theUnited States.

According to the FDIC, commercial defaults climbed 2.3% in thefirst quarter or to $3 billion from 1.6% in 2008 for the sameperiod.

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As five-year loans originated in 2005 and beyond come due, thedefault trend is set to continue in 2010 and in 2011. A peak is setto come in 2011 before the start of a decline in commercialmortgage defaults, Real Estate Econometrics data showed.

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