Fitch Sees Delinquencies Rolling Along in CMBS

For the tenth straight month, more than 50% of 30-day delinquent commercial mortgages moved to 60-days delinquent, according to Fitch Ratings update for US commercial mortgage-backed securities (CMBS). From June to July, 54% of 30-day delinquent loans fell into the 60-day delinquent bucket. “As commercial real estate fundamentals continue to deteriorate, 30-day roll rates have become an important precursor in helping to anticipate future performance for CMBS delinquencies,” says, Mary MacNeill, managing director at Fitch Ratings, in a corporate release. Most of Fitch’s so-called “Loans of Concern” are performing, making up 14.8% in multi-borrower fixed-rate deals and 28.8% in floating-rate deals. But as the economy weakens, Fitch analysts said both loans of concern and delinquencies are on the rise. For example, the loans of concern within the fixed-rate 2004 through 2007 vintages are up an average 5% from June to July, and Fitch anticipates both 30 and 60-day delinquencies to rise in these vintages. Write to Jon Prior.

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