Banks across the country face a bleak and still sinking commercial real estate market. Most experts predict rising loan-loss reserves and more big writeoffs. The problems are particularly severe at community banks, many of which still face FDIC intervention and are least likely to have the in-house skill and experience to work out problem loans.

Typically, community banks still rely on their lending staff to handle workouts. Yet this is almost certainly the least effective way to minimize losses, preserve hard-won relationships and best serve customers or shareholders. Here's why.

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