100% it was hard to underwrite COVID, but where does one draw the line? Every industry was impacted by COVID.
Refinancing here is only a problem if the outstanding loan amount is greater than the property value. That only happens when you buy a property in a bubble and put a ton of debt on it. There has to have been a huge (50%?) write down for some of the property values, depending on how much debt was used to finance all this. Regardless of whether underwriting standards were normal at the time of issuance, they clearly did not incorporate an interest rate sensitivity, and I'm not sure we should feel bad for CRE investors who've lost all their equity because they assumed low interest rates forever. And unfortunately the bank is the bagholder on the negative equity value - shouldn't banks that made a lot of bad loans go under? Individuals and households probably shouldn't be expected to do that, but CRE investors and banks doing CRE loans should be sophisticated enough to do that.
Do you know how much of those loans are under water? If it's as widespread as the tweeter is saying then yes this is a problem. I'm bitter because there are lots of businesses that planned well, didn't use a lot of leverage, properly stress-tested their businesses, and aren't asking for help.