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Fitch Sees Rise In CMBS Overdues

Fitch Ratings has seen a more than 14% rise in commercial mortgage-backed securities delinquencies in the first quarter over the last quarter of 2002.

Fitch's delinquency index reading of 1.39% for the first quarter, up from 1.31% for the previous period, represents the largest quarterly increase in CMBS delinquencies since Fitch created a loan delinquency index at the end of 2001, the rating agency said.

"The increase in CMBS delinquencies is directly due to a dramatic rise in delinquent hotel and office loans," said Mary MacNeill, senior director, Fitch Ratings. The delinquency balance for hotel loans grew by $270 million in the first quarter, a 37% increase over year-end.

Fitch is "quite certain" that delinquencies within the hotel sector will continue to rise, given the number of hotel loans Fitch analysts have under review.

The delinquent office loan balance grew by 30% in the first quarter, from $200 million to $260 million, the rating agency reports.

Within the other property sectors, retail and industrial delinquent balances in the first quarter grew by 5% and 7%, respectively.

Delinquent multifamily loans declined by 4%, however.

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