Hotel loan defaults to surge

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A recent study predicts that up to 20 percent of all loans to U.S. hotels will default by the end of 2010. The recession has caused such severe cutbacks in travel and spending that hotels won’t be able to service their debts, University of California economist Kenneth Rosen said. Hotel foreclosures almost doubled in the second quarter of the year from the first three months of 2009. Defaults and foreclosures hit $17.3 billion in the second quarter, up from $9 billion at the end of the first quarter, according to Real Capital Analytics.