During October, the 30-day late payment rate for loans securing commercial mortgage-backed securities dropped 16 basis points to end the month at 7.98%. The percentage of loans in the seriously delinquent category is 7.69%.
Almost $1 billion of CMBS loans were disposed of during October by special servicers, says Joe McBride, a research analyst at Trepp.
The reason why the delinquency rate declines after servicers sell these loans is because they are removed from the securitization. Therefore the delinquency rate improves, a Trepp spokesman says.
Servicers are concentrating on resolving the bad loans securing properties in the retail sector.
CWCapital’s pending sale of $2.5 billion of distressed assets could result in a 50 basis point decline in the delinquency rate by the end of the year, Trepp says.
Plus CWCapital is looking to sell a large number of nonperforming notes and that will also have a positive effect on the delinquency rate.