U.S. commercial mortgage-backed securities losses fell last year, though uncertain economic conditions will cloud the outlook into 2012, according to a new study from Fitch Ratings. The average loss severity, or percentage of principal lost, decreased to 53.4% last year, down from 57% in 2009. Special servicers resolved 1,427 loans, almost four times as many as in 2009, according to Fitch. In CMBS deals, when performance on the commercial real estate collateral begins to sour, a special servicer is called in as arbitrator. The ratings service also said the cumulative loss severity for last year was 42.9%, its highest level ever, and is expected to continue its rise in 2011. Loss severities were down for all major property types except retail. Office losses will likely hit historical average highs because of expiring leases, shrinking rents and continuing tenant improvements, said Fitch managing director Mary MacNeill. Hotel properties remain the second highest amount of defaults, despite improving performance. Fitch reported last month that investors expressed concern over changes at CMBS special servicers. Write to Andrew Scoggin. Follow him on Twitter @ascoggin.
Reporter at HousingWire through 2012.see full bio
Most Popular Articles
Latest Articles
Housing demand stays positive with mortgage rates near 2026 highs
Weekly pending sales increased to 75,935 versus 69,636, and purchase apps were up 7% year over year despite higher mortgage rates.
-
Boston’s international business boom equals more demand for housing
-
Trump says Fannie Mae, Freddie Mac IPO still on the table
-
Akron looks to deflate minimum lot size rules to spur infill
-
Mortgage Forward to acquire First Federal Bank’s TPO division
-
Nest Egg Protection Act would raise capital gains tax exclusion for senior home sellers
Reporter at HousingWire through 2012.see full bio