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CMBS Delinquencies Surge To $42 Billion, Or 5.2% Of Total; Average Loss Severity Hits All Time High Of 52.7%
The most disturbing observation from this month's RealPoint CMBS analysis, aside from the surge in delinquencies to an all time high of $42 billion, is that the average loss severity on CMBS liquidation has just hit a record of 52.7%. That means that on average less than half the loan is recovered in liquidation. Surely, this is not the kind of news that REITs are looking for as they perch from atop 52 week highs.
More from RealPoint:
In December 2009, the delinquent unpaid balance for CMBS increased by another $3.7 billion up to $41.64 billion from $37.93 billion a month prior. This includes the $4.1 billion Extended Stay Hotel loan from the WBC07ESH transaction. Pursuant to an amended cash management agreement, all excess funds are being held in a reserve account while the master servicer is only passing through what is deemed recoverable. Realpoint expects the delinquency reporting for this loan to continue in the nearterm, accompanied by new delinquency from other large watchlisted assets where borrowers have begun asking for debt relief and loan restructuring (such as the $3 billion Peter Cooper Village / Stuyvesant Town loan spread through multiple CMBS deals via pari passu structure, which may soon be delinquent).
Otherwise, the overall delinquent unpaid balance is up 380% from one-year ago (when only $8.68 billion of delinquent balance was reported for December 2008), and is now over 18 times the low point of $2.21 billion in March 2007. An increase in four of the five delinquent loan categories was noted in December (30-day category decline), while the distressed 90+-day, Foreclosure and REO categories grew in aggregate for the 24th straight month – up by another $2.53 billion (11%) from the previous month and over $21.52 billion (475%) in the past year (up from only $4.53 billion in December 2008).
The total unpaid balance for CMBS pools reviewed by Realpoint for the December 2009 remittance was $797.18 billion, down from $806.11 billion in November. Both the delinquent unpaid balance and delinquency percentage over the trailing twelve months are shown in Charts 1 and 2 below, clearly trending upward. The resultant delinquency ratio for December 2009 of 5.22% (up from the 4.71% reported one month prior) is over five times the 1.025% reported one-year prior in December 2008 and 18 times the Realpoint recorded low point of 0.283% from June 2007. The increase in both delinquent unpaid balance and ratio over this time horizon reflects a steady increase from historic lows in mid-2007.
And RealPoint's short-term forecast:
- Over the past three months, delinquency growth by unpaid balance has averaged roughly $3.3 billion per month. Assuming ongoing monthly pay-down and liquidation activity, if such delinquency average were increased by an additional 25% growth rate, and then carried through the first quarter 2010, the delinquent unpaid balance would reach $54 billion and reflect a delinquency percentage slightly above 6.8% by March 2010. Carried through mid-2010,the delinquent unpaid balance would top $66 billion and reflect a delinquency percentage above 8.5% by June 2010.
- In addition to this growth scenario, if we again add-in the potential default of the $3 billion Peter Cooper Village / Stuyvesant Town loan, the delinquent unpaid balance would reach $57billion and reflect a delinquency percentage above 7.2% by March 2010. Carried through mid-2010, the delinquent unpaid balance would top $69.4 billion and reflect a delinquency percentage close to 9% by June 2010.
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Not a problem. Green shoot. Buy, buy, buy. Leverage it up, boyz.
Funny how you mention that. Leverage got us into this mess. Yet the rulings reversing the permission for 30-1+ leverage has yet to be reversed.
Years ago I coined a phrase "reverse leverage is a bitch."
That dog is about to take another bite out of the bull and the bullshitters once again.
reverse leverage is a bitch in heat with no studs around....also known as deflationary depression
Today's Failed Banks (so far):
Marshall Bank, NA - Hallock, MN - $4.1M
Florida Community Bank, Immokalee, FL - $352.6M
First National Bank of Georgia, Carrollton, GA - $260.4M
Total Cost to DIF = $617.1M
6:34 P.M. — Federal regulators shut down Immokalee-based Florida Community Bank today and dealt most of its deposits and assets to a Miami bank chartered last week.
Branches will reopen as locations of Premier American Bank but will continue to conduct business under the name Florida Community Bank.
Florida Community Bank had 11 branches and $774.6 million in deposits as of Sept. 30, the most recent information available.
The bank, founded in 1923, had been hard hit by the foreclosure crisis in Florida. The bank had $191.3 million in bad debt as of Sept. 30.
http://www.news-press.com/article/20100129/BUSINESS/100129055/1075/Feds-...
... dealt most of its deposits and assets to a Miami bank chartered last week.
That dog deserved to die ages ago. Imagine giving 'mater pickers from Mehico with no proof of citizenship $150K mortgages for homes.
Ooops, was I supposed to say that?
Imagine giving waspy Princeton grads (with proof of citizenship) working in Manhattan an $8.5 million mortgage in East Hampton that they can't afford. Hamptons mortgage defaults on white U.S. citizens up 230% over last year.
http://www.nypost.com/p/news/local/foreclose_threat_hits_hamptons_big_93XlocoNSOklqS04gMhfwM
6 of 1, 1/2 dozen of another.
if your not racist it's 6 of 1, 1/2 dozen of another, but if you are a racist, its always the non-white poor people that screwed everything up and are more morally corrupt than everyone else, just like poor black folks supposedly controlled the drug trade, were drug king pins and white, rich people never used or sold drugs (whatever)...
and now illegal immigrant farm workers conspired to take down our financial system with their wily con on unsuspecting, honest banksters who were so reluctant to provide them loans and resell them for fabulous profit but were dazzled by brilliant promises of these evil con men farm workers that preyed on the bank's earnest charitable desire to provide said farm workers with first class housing regardless of economic harm that might come to bank shareholders (not)...
as usual, morally corrupt poor people did the dangerous street, dirty work in the fraud and theft while morally corrupt rich people made most of the money in less risky, higher level white collar crime syndicates, while most morally decent poor and middle class people were just prey and victims of such financial pushers.
Unadultered capitalism is SUCH a bitch sometimes.
Which race are the banksters? or is that just to much racism for zh.
Which race are the banksters? or is that just to much racism for zh.
+1
Your supposed to say it if you have any evidence that its true. In fact, it was fairly difficult for undocumented workers (aka illegal immigrants) to get mortgages because they were not securitizable. In fact those that have been originated perform much better than average because they were underwritten much more conservatively than those to white people with NO PROOF OF INCOME, which actually turned out to be a better default indicator.
Chartered last week.
Well I don't see anything funny about that. Nope...nothing to see here at all.
The "Miami bank" is Premier American Bank, which was acquired last week by the Bond Street Bank (per Wall Street Journal), which is a subsidiary of Bond Street Holdings, New York City .. "formed to acquire FDIC insured assets" ... anybody know who they are?
http://www.fdic.gov/regulations/laws/federal/2009/09c39AD47.PDF
http://www.thedeal.com/newsweekly/dealmakers/weekly-movers-and-shakers/b...
FL Community is nasty.
http://www.wlmlab.com/bkHm.asp?inst=HC3100358
Think I'll add more SRS calls soon
SRS = corrupt.
CRE vacancy rates could rise to 95% and SRS would still be in single digits.
SRS is not the enemy. Extend and pretend is.
Add $354.5 M:
http://www.fdic.gov/news/news/press/2010/pr10025.html
Not Billions or Trillions, but it does add up...
Another lotto Friday to the over capitalized banks
not lending to the private sector, thanks to the FDIC!
***UPDATE***
Today's Failed Banks (FINAL):
Marshall Bank, NA - Hallock, MN - $4.1M
Florida Community Bank, Immokalee, FL - $352.6M
First National Bank of Georgia, Carrollton, GA - $260.4M
American Marine Bank - Bainbridge Island, WA - $58.9M
First Regional Bank, Los Angeles, CA - $825.5M
Community Bank & Trust, Cornelia, GA - $354.5M
Total Cost to DIF = $1.856 BILLION
Total Cost to DIF = $1.856 BILLION
Total Cost to DIF = $1.856 BILLION
Total Cost to DIF = $1.856 BILLION
Total Cost to DIF = $1.856 BILLION
it only goes up bitchez. lmao!
Anyone feel that we've entered a new paradigm?
That the risks taken by particklelerly the Goldman Sucks' of the world, and other, well,....can you really call them 'financials'? that's the new paradigm-it hasn't even got a name yet----with 100 to 1 leverage, have now been forever elevated out of the normal world we all inhabit when we borrow and can't pay? That these highly leveraged organizations have so deftly managed to skirt our legal system, and become eternally, TBTF? That they exist in a galaxy free of all restraints?
I do. It's easier on the mind to disregard what we hate and don't hate about these demons getting away with it and simply accept the reality: This is never going to go away, not without physical violence, death, and destruction of them and their spawn. Think: Alien Meets Godzilla.
The math doesn't lie, there is only so much they can cover up. I think we've entered a new phase where the citizens are starting to pay more attention and becoming more aware of what is going on. They may not understand the CDS, CMBS, but they see Wall Street getting taxpayer $ and then paying out huge bonuses, meanwhile they are struggling to put food on the table. Politically, these bailouts can't continue, and the next leg down with Alt-A residential and CMBS defaults will be a doozy. BB must have a lot of sleepness nights trying to figure out how he can contain the damage.
CMBS's are living up to their explosive promise. Where's that bullshitter Kiyosaki and his advise 2 years ago to go buy up all the rental properties around since people always needed a place to live. He was right about that except all the mothers basements were not up for sale.
yeah, no one could have predicted people would double up when they were strapped. We will need oil and we will need shelter, but why someone thinks that means the price of housing or oil will never drop, even after a record run-up in price is beyond me. No one could have predicted high oil prices would slow global economy and speed energy conservation and exploration for other energy sources and reduce deman eventually... and no one could have predicted people would double up, take in roomers, go to tent and RV cities ..nothing like that ever happened before...arrrg these people are so stupid, they think something is true just cause they said it, in the face of all evidence otherwise.
Ouch.
Thanks for the update on CMBS Tyler.
It's going to be interesting watching REITs this year.
Toxic liquidity fills the cup of fornication and the belly of the whore cries to be delivered out of possession.
The foul birds have sewn demand destruction and debt upon their heads like hot coals.
The Talking Heads Burning Down The House offer a Road To No Where, Same As It Ever Was ...same as it ever was.
You may ask yourself, how did I get here. Fa, fuh fuh fuh fa faa, better run run run, run away. These psychopaths never take a bath.
Take me to the river, drop me in the water and raise me up outta here. These are the waters of the deep, void and found wanting as they overflow with iniquity. The equity reserved for the just has been consumed by the wicked for the sake of the strong delusion brought forth with the offer of temptation on behalf of the claim of dominion, defining separation and absence from the Truth, the Light, the Love of God in Christ.
Funny how these jerks think they can avoid the meaning of life, that being love, as their works are clearly witnessed by the wise and yet still the fools offer their will to be done as if the truth is a choice that can be avoided by sacrificing the laborers of the harvest under their foot. The spiritually blind fool agrees the Moon is risen as the Sun , as the tamed shrew, for the sake of a self devouring beast sealed to know want upon the day of judgment.
Pathetic!!! What fool does not see the season and the invaders ripe upon the stock, black as night and mixed like iron and clay. Ain't no Blackrock gonna shatter their own feet and still remain standing as they were. Bunch of idiots. What is coming to stamp out corruption is, The White Stone of Liberty, Freedom and Justice for all ...and boy is almost time.
I'm going to go out on a limb here and say you skipped the red and blue pill and went striaght to the yellow?
Not quite, took the red blue yellow and the offer of salvation.
I see foul birds out on limbs now, they are seeking to devour anything that grows upon the branches. What flesh sustains you little tenaciousj birdie? Your own?
Is that why your foot is in your mouth?
Ever considered, it may be good to stop self devouring and just live by what is risen from the branch? ...so you do not find yourself fallen and turned to tree food?
Thanks Tyler.
Appreciated update.