In February 2010, the delinquent unpaid balance for CMBS (commercial mortgage backed securities) increased by another $1.87 billion, up to $47.82 billion from $45.94 billion a month prior. Aggregate delinquency increased despite a slight decrease in 30-day delinquency. The overall delinquent unpaid balance is up almost 300% from one-year ago (when only $11.98 billion of delinquent unpaid balance was reported for February 2009), and is now over 21 times the low point of $2.21 billion in March 2007. The distressed 90+-day, Foreclosure and REO categories grew in aggregate for the 26th straight month – up by $2.88 billion (9%) from the previous month and $29.36 billion (420%) in the past year (up from only $6.98 billion in February 2009).
Based upon an updated trend analysis, we now project the delinquency percentage to grow to between 8% and 9% through mid 2010, potentially approaching and surpassing 11% to 12% under more heavily stressed scenarios through the year-end 2010). This forecast / outlook is driven by the watchlist reporting of several Realpoint identified High Risk Loans from recent vintage transactions that continue to show signs of stress and are on the verge of delinquency, along with continued balloon maturity defaults from more seasoned transactions. As part of our monthly surveillance efforts of every CMBS transaction, we continue to monitor in detail many large Realpoint Watchlisted loans that have never met their pro-forma underwritten expectations. This includes a large amount of loans that remain current in payments but have already been transferred into special servicing - many of which may ultimately default based upon a denial of requests for loan modifications or debt restructuring by the special servicers, or a decision by borrowers to surrender the collateral.
Delinquency Rates
5.999% February 2010
5.762% January 2010
5.223% December 2009
1.431% February 20009
Link to complete Realpoint report
Our super hero Tim Geithner has commercial real estate under control...
CNBC interview on 3/29/10: Mounting losses from commercial real estate loans will continue to be a problem for the U.S. and especially smaller banks, but it can be managed, Treasury Secretary Timothy Geithner said Monday. "Commercial real estate's still going to be a problem for the country," Geithner said in an interview with CNBC. "But we can manage through this process."
"There's no need to fear, Tim Geithner is here"!
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