Fitch Ratings has released a formal rating methodology on commercial real estate construction loan pools, declaring itself the first major rating agency to do so.The analysis of such loans is different from that of conventional loans supporting commercial mortgage-backed securities, said Fitch senior director Joe Kelly. "CRE construction loans are secured by collateral that is not a finished product," Mr. Kelly said. "The unpredictable nature of a CRE construction project makes the responsibilities and expertise of the sponsor and servicer critical throughout the entire project. A loan's repayment is contingent upon the successful completion of the construction project because the loans do not initially generate sufficient cash flow to cover debt service." Fitch's CRE construction loan model determines a base default probability and a base loss severity for each loan depending on a project's percentage completion. Fitch director Richard Carlson said servicing this type of loan "relies upon a different skill set than CMBS servicing," and therefore Fitch-rated CMBS servicers "are not automatically qualified by Fitch to service CRE construction loans." Fitch can be found online at http://www.fitchratings.com.
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McCargo stabilized the agency at a crucial time as she helped navigate it through both a pandemic and subsequent dramatic interest-rate cycle change.
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The quasi-public entity's plan to buy certain closed-end seconds would constitute "unnecessary government encroachment," the Structured Finance Association said.
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The mortgage subsidiary of Hilltop Holdings posted another quarterly loss and volume slipped, but management also sees signs of optimism.
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The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
April 18 -
In a Senate hearing, Director Sandra Thompson said a raise to the required income threshold provided to affordable housing was on the table, while housing regulators also faced questions related to property insurance hikes and title insurance waivers.
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The nonpayment rate for non-qualified mortgages is up 21 basis points from February and 134 basis points from March 2023, Morningstar DBRS said.
April 18