Fitch: Specially Serviced CMBS Loans Up 48%

The deteriorating performance of commercial mortgage-backed securities has resulted in a "dramatic jump" in the transfer of commercial real estate loans to special servicers during the first quarter, according to a Fitch Ratings report.The Fitch CMBS report: "What's in Special Servicing?" shows the dollar balance of specially serviced CMBS loans rose to $23.7 billion in the first quarter, up 48% from the previous quarter. Many of the "loans of concern" are jumbo vintage loans originated in 2006-2007 and Fitch said 20 of the largest specially serviced loans have balances ranging from $360 million to $73.5 million. "Later vintage CMBS transactions are backed by loans originated at the height of the market and are thus susceptible to significant income and value declines," said managing director, Mary MacNeill. Fitch said actual delinquencies remained relatively low at 1.53%. But the number of loans transferred to special servicing "due to imminent default" is growing.