CMBS Loan Defaults Hit 9.5%

NEW YORK CITY-With a 133-basis point rise in the cumulative default rate for CMBS during the second quarter, predictions of an 11% to 12% rate of securitized loans in arrears come closer to reality. Fitch Ratings says 9.48% of the fixed-rate conduit CMBS loans in its universe were in default at the end of Q2, while Realpoint said in late July that $3.11 billion of unpaid loans were added to the total during June.

“Based on an updated trend analysis, we now project the delinquency percentage to potentially grow to 11% to 12% under more heavily stressed scenarios through the year-end 2010,” Realpoint says in its July 23 report. The agency says the forecast is driven by the watchlist reporting and transfers to special servicing of several high-risk loans “that continue to show signs of stress and are on the verge of delinquency.” Realpoint says the unpaid balance of delinquent loans could reach $90 billion by Dec. 31.