Mortgage defaults are increasing at an alarming rate. The delinquency rate for loans tied to commercial mortgage-backed securities jumped to 10.32 percent in June, which was an increase of 317 basis points over the May number.
"If the property owners who have the mortgages are unable to pay, it's clear that investors in CMBS are going to suffer losses," says Gayle Klein, a principal in McKool Smith's New York office.
If these rents aren't paid, servicers must deal with a series of questions, according to Klein. These questions start with whether they create a new forbearance or if they foreclose.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
