Correspondent lending is proving it may still have a heartbeat, as smaller lenders are lining up to enter the space in an effort to grab business...

Commercial real estate juggernaut Jones Lang LaSalle [stock JLL][/stock] is clearly turning bullish on the recovery in the commercial mortgage-backed securities market in 2011. Despite calls that CRE is eluding recovery overall, JLL is expecting CMBS issuance to hit up to $50 billion in 2011.

Private equity firm SilverLeaf Financial continues to expand its investments in distressed assets, recently acquiring two commercial loans totaling nearly $3m. The loans, acquired from United Commercial Bank, secure office/industrial properties in Massachusetts: a 452,000-square-foot property with a $2.3m loan and a 40,000-square-foot property with a $700,000 loan. The $2.3m loan generates strong cash flow, and SilverLeaf said it is negotiating work-out options with the borrowers of the smaller loan.

The seasonally-adjusted delinquency rate among residential mortgages reaches a record high in Q109, soaring to 7.9% from 6.3% in the previous quarter, according to statistics calculated by the US Federal Reserve. It marks the 12th quarterly increase since Q106, when the rate sat at 1.6%, as well as the highest rate in the Fed's records starting in 1985. The staggering rates led to charge-off-related losses at the banks studied and indicate the residential mortgage industry may continue to unwind for quarters to come.

Regular HW readers know that for the past six months I've been hounding the concept of "underlying assets" -- the idea here is that for all of the ways aggregated cash flow tied to debt can be sliced and diced, performance still rests on a set of basic assumptions regarding payment of those debts. (And when those assumptions prove to be wrong, all hell can break loose.) American Banker's Todd Davenport looks to be singing the same tune: