Fitch: Corrected U.S. CMBS Loans Leaving Investors Guessing

NEW YORK, NY--Many  specially serviced U.S. CMBS loans are returning to performing status without  current  financial  data,  leaving  investors in the dark over the property’s  performance, according to Fitch Ratings in its latest U.S. CMBS newsletter.

Fitch  reviewed  a  slew of loans that returned to master servicing in July

and  August  and  found limited financial reporting since prior to the loan

transferring  to special servicing. Fitch also found that approximately 60%

of  the  loans  in  special servicing classified as current on debt service

payments have not reported year-end 2010 financial data.

'That   special  servicers  are  not  collecting  operating  statements  on

specially  serviced loans and reporting them through the master servicer is

disconcerting,' said Adam Fox, Senior Director.

 Fitch has asked several of the larger special servicers to provide business plans for a sample of recently corrected loans where recent financials were not reported.

Additional  information  is available in Fitch's weekly e-newsletter, 'U.S. CMBS  Market  Trends',  which  also  contains  recent rating actions and an overview  of  newly  released  CMBS  research, including Fitch presales and Focus  reports.  The  link  below enables market participants to sign up to receive future issues of the E-newsletter:

 

'http://www.magnetmail.net/forms/display_form.cfm?fid=22908&mid=929091&rid=297925736&rtype=mm&uid=Fitch

Contact:

Adam Fox

Senior Director

+1-212-908-0869

Fitch, Inc., One State Street Plaza, New York, NY 10004

Mary MacNeill

Managing Director

+1-212-908-0785

Media   Relations:   Sandro   Scenga,   New  York,  Tel:  +1  212-908-0278:

sandro.scenga@fitchratings.com.

Additional information is available at http://www.fitchratings.com/

Fitch: U.S. CREL CDOs Delinquencies Up Slightly

  

NEW YORK, NY -- After  four  consecutive  months  of  decline,  CREL CDO delinquencies rose slightly  last  month,  according  to  the  latest index results from Fitch Ratings. The full results are featured in this week’s U.S. CMBS newsletter.

CREL CDO late-pays rose to 12% from 11.6% in August. ‘Given the instability

in the broader economy, CREL CDOs delinquencies are expected to continue to

seesaw going forward,’ said Director Stacey McGovern.

In  September, asset managers reported 11 new delinquent assets.  Among the newly  delinquent  assets  were three matured balloon loans, six new credit impaired  securities,  and  two term defaults. Partially offsetting the new delinquencies were six removed assets, which included:

--One real estate-owned (REO) asset, which was sold at 38% of par;

--One mezzanine loan that was foreclosed out at a total loss; and

--Four formerly credit impaired CMBS securities.

Ratings  on  the most junior classes remain subject to volatility as losses

continue  to  accumulate.   In  September, CREL CDO asset managers reported

approximately $60 million in realized losses.

Additional  information  is available in Fitch's weekly e-newsletter, 'U.S.

CMBS  Market  Trends',  which  also  contains  recent rating actions and an overview  of  newly  released  CMBS  research, including Fitch presales and Focus  reports.  The  link  below enables market participants to sign up to receive future issues of the E-newsletter:

http://www.magnetmail.net/forms/display_form.cfm?fid=22908&mid=929091&rid=297925736&rtype=mm&uid=Fitch

Contact:

Stacey McGovern

Director

+1-212-908-0722

Fitch Inc., 1 State Street Plaza, New York, NY 10004

Karen Trebach

Senior Director

+1-212-908-0215

Media   Relations:   Sandro   Scenga,   New  York,  Tel:  +1  212-908-0278:

sandro.scenga@fitchratings.com.

Additional information is available at http://www.fitchratings.com/

Fitch: U.S. CMBS Losses Fell in 2010; Outlook for 2012 a Question Mark

NEW YORK, NY -- While special servicers made more tangible progress in stemming U.S. CMBS losses this past year, current economic uncertainty makes the outlook for next year more uncertain, according to Fitch Ratings in its latest annual U.S. CMBS loss study.

Nearly four times as many loans were resolved by special servicers in 2010, with 1,427. Additionally, the average loss severity declined to 53.4% compared to 57% in 2009.  'Special servicers have been increasingly successful selling properties and working with borrowers for discounted loan payoffs,' said Senior Director Britt Johnson.

However, current economic uncertainty makes it more difficult to predict 2012 numbers. 'If the current  economic volatility continues, special servicers may struggle to find borrowers capable of obtaining capital for distressed real estate,' said Johnson.

Drilling down into specific property types, loss severities fell for all major property types except retail. However, Fitch expects the cumulative loss severity in 2011 to continue eclipsing historical averages, which increased to its highest level ever at 42.9% in 2010.

Losses on retail and multifamily loans will remain volatile. Elsewhere, office losses will trend north of historical averages in spite of recent improvements in some regional markets. 'With leases set to expire in a weaker economy, office landlords will have to continue lowering rents and paying for tenant improvements and rent concessions,' said Managing Director Mary MacNeill.

Though performance among hotel properties has improved notably in recent months, they still hold the second highest amount of defaults. 'There are still many delinquent hotel loans to resolve, though dispositions will slow next year if the lending environment tightens,' said MacNeill.

Fitch's 'U.S. CMBS Loss Study: 2010' is available at 'www.fitchratings.com' under 'Latest Research' or by clicking on the above link.

Contact:

Britt Johnson

Senior Director

+1-312-368-3141

Fitch Inc., 70 W. Madison St., Chicago, IL 60602

Mary MacNeill

Managing Director

+1-212-908-0785

Media Relations: Sandro Scenga +1-212-908-0278, New York; sandro.scenga@fitchratings.com

Additional information is available at http://www.fitchratings.com/