Recently I blogged about President Obama's proposal to help community banks lend more money to entrepreneurs. For many small business owners in the Great Recession, community banks have been a lifeline. But that lifeline could be about to snap. The Congressional Oversight Panel, which monitors the financial bailout, just released a report on the state of commercial real estate lending-and the news is not good. "There's been an enormous bubble in commercial real estate, and it has to come down," panel chair Elizabeth Warren told the Washington Post. "A mortgage crisis like the one that has devastated homeowners is enveloping the nation's office and retail buildings," the Post reports. The fallout will hit community banks hard. In general, large, community banks haven't been hurt by the residential real estate crisis. But community banks issued higher proportions of commercial mortgages than did the big banks. Some 3,000 community banks have disproportionate amounts of commercial loans relative to their assets, according to the oversight panel's report. And, as Warren says, "Every dollar [community banks] lose in commercial real estate is a dollar they can't use for small businesses." Commercial real estate mortgages have shorter terms than standard residential mortgages; according to the report, some $1.4 trillion in commercial real estate debt will come due in the next three years. And Warren says, half of all commercial real estate mortgages will be underwater by 2011. Areas most at risk? South Florida, metropolitan New York and Washington, DC, lead the nation in the per capita value of commercial real estate currently in foreclosure, default or delinquency, according to research group Real Capital Analytics. Responding to the problems many borrowers are already having refinancing commercial mortgages. President Obama has proposed expanding the SBA's 504 loan program to temporarily support refinancing for owner-occupied commercial real estate loans. Currently, these loans cannot be used to refinance maturing debt. The full report from the Congressional Oversight Panel is interesting reading.