Two new commercial mortgage-backed securities (CMBS) are being developed even as delinquencies in the market doubled from a year ago. Citigroup (C) and Goldman Sachs (GS) are securitizing a $750m multi-borrower deal. JPMorgan is constructing a $650m CMBS deal on behalf of Vornado Realty Trust, according to market participants. Both are transactions under Rule 144A, meaning it’s a private placement among large institutional investors. But delinquencies are still increasing on existing CMBS. The delinquent unpaid balance of loans backing commercial mortgage-backed securities (CMBS) passed $60bn in June, a 111% increase from a one year ago, according to the analytics firm Realpoint. Realpoint tracks delinquency data on nearly $800bn of CMBS pools for its monthly reports. In June, the unpaid balance of these loans increased $3.1bn from the previous month. The delinquent loans make up 7.7% of those reviewed, up from 7.27% in May. It’s over two times the 3.5% reported a year ago and more than 27 times the 0.2% low point recorded in June 2007. Four of the five delinquency categories increased from May. The only one to fall was the 60-day delinquency bucket, dropping $2.06m from the previous month. There was a $3.2m increase of loans that fell 30 days behind. The 90-plus day, foreclosure and REO categories grew for the 30th straight month, up another $2bn, or 5%, from May. The amount of loans falling into that category has more than tripled from a year ago, up $30.7bn. Realpoint still maintains that the delinquency rate could grow to between 11% and 12% by the end of 2010. Fitch Ratings reported earlier in the month that eight loans in CMBS portfolios and hold balances greater than $20m are likely to default in August. Analysts at Deutsche Bank said the amount of these loans falling into special servicing is continuing to outpace the workouts, meaning a shadow inventory of commercial foreclosures is building. Earlier in the year, another analytics firm, Trepp, reported that these spiking delinquencies could cause bank failures to increase as much as 30% in 2010. There has already been more than 100 closings this year. Write to Jon Prior.

Most Popular Articles

Quicken Loans hits “pause” on One Reverse Mortgage, moves all employees to Rocket Mortgage

Quicken Loans has become the largest mortgage lender in the country over the last few years due in large part to the growth of Rocket Mortgage, the company’s digital mortgage platform. As it turns out, Rocket Mortgage is becoming so big that it’s now consuming other parts of the Quicken Loans family of companies too, namely the company’s reverse mortgage lender.

Feb 21, 2020 By

Latest Articles

Realogy Brokerage Group emerges from company-wide consolidation

Realogy will be renaming NRT, the business unit that includes Corcoran Group, Sotheby’s International Realty and Coldwell Banker.

Feb 25, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please