Unpaid balance on CMBS delinquencies falls to $1.5 billion
The delinquent unpaid balance on loans within commercial mortgage-backed securities fell by $1.5 billion in June, hitting $60.86 billion, according to the latest Morningstar CMBS delinquency report. That compares to an unpaid principal balance of $62.37 billion a month earlier, making it a 1.5% decline in unpaid principal balance between the months of May and June. This is the second consecutive drop in the delinquent unpaid CMBS loan balance when considering the unpaid balance on all CMBS loans fell about $974.6 million the previous month, which was the first decline since January. Morningstar concluded that "a large majority of the decrease-net change in delinquency can be found within liquidations." About $1.27 billion in liquidations occurred in June 2011 involving 142 loans. A month earlier, $1.15 billion in liquidations were reported for May across 126 different loans, Morningstar said. Improvements when it comes to balances and payments on CMBS loans have been noticed since the start of the summer. The rate of delinquent loans in commercial mortgage-backed securities declined in June but still remains higher than 9%, as it has for all of 2011, according to Moody's Investors Service. Four new CMBS deals worth more than $6.2 billion offset the roughly $5.7 billion of legacy CMBS that exited the space during June. If not for those four deals that closed last month, the delinquency tracker would have only slid to 9.12% for June, according to Moody's analysts. Write to Kerri Panchuk.