Legacy U.S. CMBS Performance More Stable: Fitch

Approximately $2.3 billion in loans that were included in 2004 commercial mortgage-backed securities were "repaid, defeased or were otherwise resolved during the third quarter of 2014," according to a report by Fitch Ratings.

The report noted that overall the performance of legacy CMBS deals, those originated before 2007, has stabilized. But Fitch found the 2004 vintage of particular interest.

But because these loans are no longer part of the pool, consequently as of Sept. 30 the percentage of delinquent CMBS loans rose to 20.33% of the total, from 10.14% as of June 30, while specially serviced loans represented 20.43% of the total, up from 14.18% in the second quarter.

And that percentage is likely to increase as managing director Mary MacNeill explained in a press release, "The remainder of 2004 CMBS loans are still susceptible to adverse selection."

In dollars, delinquent 2004 loans increased 22% from the previous quarter, Fitch said, while specially serviced 2004 loans decreased 12%.

During the third quarter the report finds that new CMBS issued during the third quarter reflect increased diversity in properties and "slightly higher leverage."

 

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