Thursday, September 29, 2011

Moody's: U.S. CMBS Loan Delinquencies Decline to 9.01%

The delinquency rate on loans held in U.S. commercial mortgage-backed securities (CMBS) fell 23 basis points in August to 9.01 percent, according to Moody’s Investors Service. Based on the New York-based agencies market assessment, the rate of loans in special servicing also declined last month, falling 7 basis points to 12.23 percent. Even with a slip in the numbers, Moody’s notes that August was the eighth consecutive month that delinquencies in the U.S. have been above the 9 percent mark. The resolutions of delinquent loans continued to exceed new delinquencies in August. Last month, there were $4.1 billion in resolutions versus $2.6 billion in new delinquencies.Avoid Foreclosure. Modify your loan. Eliminate your back payments, and save your home The difference lowered the total amount of delinquent loans to $54.0 billion from $55.6 billion the month before. Moody’s reports two new deals totaling $3.1 billion joined the CMBS fray, but approximately $4.7 billion of CMBS exited. Total outstanding CMBS issuance now stands at $599.5 billion, the first time that the CMBS universe has been less than $600 billion since February 2007, according to Moody’s. By property type, the hotel sector saw the greatest improvement in its delinquency rate in August, as it fell by 44 basis points during the month to 14.56 percent. Industrial saw the biggest increase, as its delinquency rate rose by 43 basis points last month to hit 11.2 percent. The multifamily sector continues to have the highest delinquency rate, at 15.21 percent. That reflects an 8 basis point increase between July and August. The office and retail property sectors are holding on to the lowest delinquency rates at around 7 percent. During August, the office delinquency rate fell 23 basis points to 7.36 percent, while the retail delinquency rate dropped 29 basis points to 7.08 percent. By region, the South and West both saw improvements in their delinquency rates last month. The rate for the South declined by 67 basis points to 10.37 percent, while in the West it fell 54 basis points to 8.28 percent. The Midwest delinquency rate increased by 32 basis points to 9.67 percent. The delinquency rate in the East was nearly unchanged versus the prior month, declining by one basis point to 7.50 percent. Los Angeles and Washington D.C. rank as the strongest performers among major markets, with delinquency rates less than half the national average. Las Vegas and Riverside are the two weakest performers, both with delinquency rates more than twice the national average.

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