CMBS delinquencies edge lower in February

Analysts at Trepp say the delinquency rate among commercial mortgage-backed securities declined in February, HousingWire reports.

Analysts at Trepp say the delinquency rate among commercial mortgage-backed securities declined in February, HousingWire reports.

The delinquency rate in this sector of commercial real estate lending fell 15 basis points in February from the previous month to 9.37 percent. Mortgage data shows this share of delinquencies totaled roughly $56.4 billion.     

Experts claim a principal reduction of these loans would result in less than $1 billion in losses to lenders. While this is still a notable amount, it is significantly less than the amount that could potentially be lost if a number of the commercial borrowers default on their loans.

However, it was noted that while these loans are delinquent, many of them are current on their interest payments. 

"The resolution of these performing, but past maturity loans will likely determine whether the delinquency rate rises or falls over the next 12 months," said Trepp senior manager Manus Clancy.

Meanwhile, a growing problem looms in the CMBS industry, according to the news source, as a greater number of special servicers are starting to charge shadow fees on distressed lenders.



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