CMBS Soldiers On, Despite Downgrade, Proposed Regulations

NEW YORK CITY-CMBS 2.0 is a topic on many minds, but how proposed regulations concerning risk retention and recent economic upheaval will affect this growing new batch of bundled securities remains to be seen. GlobeSt.com spoke to several insiders about the return of CMBS to gauge how current economic conditions, and future regulations, factor in its return.

Any discussion of the future of CMBS must take into account events from earlier this month. First, Trepp announced that US CMBS delinquency rates had spiked in July, in fact setting a record. The percentage of loans 30 days or more delinquent, in foreclosure or REO rose to 9.89%. This marks an all-time high for US CMBS delinquency, with the value of the loans sitting at $61.3 billion, according to Trepp’s July 2011 US CMBS Delinquency Report.