Magazine article Mortgage Banking

Specially Serviced CMBS Loans Drop to Three-Year Low

Magazine article Mortgage Banking

Specially Serviced CMBS Loans Drop to Three-Year Low

Article excerpt

* Special servicers continue to work out delinquent commercial mortgage-backed securities (CMBS) loans, as the volume of underperforming loans fell to lows not seen in three years, reported Fitch Ratings, New York.

After peaking at $91.7 billion in 2010, the volume of specially serviced CMBS loans fell to $70.6 billion as of Dec. 31, 2012. This represents the smallest population in special servicing since the run-up started in 2009.

"Perhaps the most encouraging sign is how closely the volume of CMBS loans going in to special servicing and the ones coming out are aligned now," said Stephanie Petosa, managing director with Fitch Ratings. She said 2012 saw $49.9 billion in loans transferred into special servicing and $47.1 billion coming out, and compared those figures with 2009, when $74.9 billion transferred in with only $8.8 billion transferring out. "This is a notable contrast," she said.

Meanwhile, Trepp LLC, New York, reported that the 30-plus-day delinquency rate for commercial real estate loans in CMBS fell to 9.42 percent in February--its lowest level in a year.

"Overall, the ... CMBS delinquency rate has fallen 92 basis points since hitting a peak of 10. …

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