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CMBS Delinquencies Continue Upward Climb

CMBS Delinquencies Continue Upward Climb

A new Realpoint report shows that commercial-mortgage backed securities (CMBS) delinquencies rose by $3.26 billion in April, to a trailing 12-month high of $17.15 billion. The overall delinquent balance represents a 329 percent increase from $3.99 billion in delinquent CMBS reported in April 2008 and is seven times greater than the low point of $2.21 billion in delinquencies in March 2007. Realpoint tracks mortgages that are 30, 60 or 90 days overdue, are in foreclosure or are real estate owned as delinquent.

The total unpaid balance for all CMBS pools reviewed by Realpoint was $830.1 billion in April—down from $834.5 billion in March. But the delinquency ratio moved past 2.06 percent during the month, 40 basis points higher than the 1.66 percent ratio recorded in March. The figures represent a steady increase from the historic lows in delinquent unpaid CMBS balance and delinquency ratio reached in mid-2007.

Looking forward, Realpoint expects the upward trend to continue, with the real estate industry possibly seeing $40 billion in delinquent unpaid CMBS balance before the end of 2009. The delinquency ratio will likely move beyond 4 percent before year-end, due to distress experienced by several large loans of recent vintage.

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