Sep
13
CMBS Loan Delinquencies Exceed 8%
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Special servicers modified a record $2.1 billion in loans backing commercial mortgage-backed securities (CMBS) in August, but delinquencies continue to grow, according to the credit-rating agency Fitch Ratings.
The delinquency rate on CMBS loans reached 8.48%, a 23 basis point increase from July. There were $3.1 billion in new delinquencies, driven mostly by five loans recent defaults of loans worth more than $100 million.
Another credit-rating agency Moody’s reported the CMBS delinquency rate increased 21 bps to 8.1% in August.
“Delinquency rate increases have moderated over the past three months, but the overall rate itself is expected to continue rising over the near term, with the potential for an occasional spike given the large reservoir of troubled loans in special servicing,” said Moody’s Managing
Director Nick Levidy.An analytics firm Trepp also reported the delinquency rate on CMBS at 8.92%.
“Though special servicers are working out loans at an increased rate, the volume of new delinquencies has not yet subsided,” Fitch Senior Director Adam Fox said. “Highly levered loans originated at the market’s peak continue to default as borrowers seek modifications or hand back the keys to underperforming assets.”
New delinquent loans in August included the Innkeepers Portfolio, worth more than $825 million. The Hyatt Regency in Bethesda, Md. worth $140 million also fell into delinquency in August.
The delinquency rate on hotels passed 20% in August, up from 18.6% in July. Multifamily was second with 14.18% delinquency rate, and retail third with a 6.11% rate. Industrial properties had a 5.55% delinquency rate, and delinquencies on office properties was just over 5%.
Sep
9
Home prices gained 5.7% over the three months ending in August, according to real estate data provider Clear Capital. But analysts added price growth has slowed and will drop to a new low in 2011.
The price gain through August is down 240 basis points from the July report, which dropped 70 bps from June. Alex Villacorta, senior statistician at Clear Capital, said prices built up a 13% cushion from its trough in 2009.
“Overall, prices look poised to continue their deceleration with a likely drop into negative territory by the end of the year,” Villacorta said.
With the drastic drop in home sales shown in July, prices will continue to soften and drop below 2009 levels next year.
Drilling down to the metropolitan statistical areas (MSAs), many of the 15 highest performing markets showed double-digit quarterly gains through August. Home prices in San Diego increased 11.2% above levels seen a year ago, but most of the improved areas were in the Midwest and South regions.
Conversely, 11 of the previously top-performing markets showed accelerating declines. New Orleans, Cleveland and Columbus had prices fall by more than 7%.
“The interesting part about all of these markets is that for the first time, the local markets are left to their own devices,” Villacorta said.
Sep
8
Tennessee will get about $10.2 million in Neighborhood Stabilization Program grants as part of $1 billion U.S. Housing and Urban Development earmarked for states struggling to reverse the effects of the foreclosure crisis.
State and local governments can use the neighborhood stabilization grants to buy land and property; to demolish or rehabilitate abandoned properties; and/or to offer downpayment and closing cost assistance to low- to moderate-income homebuyers (household incomes not exceeding 120 percent of area median income).
Memphis will get more than half of the state funding, with about $5.2 million set aside for the Bluff City. The rest of the state will get $5 million.
“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said HUD Secretary Shaun Donovan, in a press release. “We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight.”
Memphis has struggled with high foreclosure rates since the housing crisis began, although the numbers seem to be trending down. The Memphis metro area had 1,388 foreclosure filings in July, or one in every 399 households, according to RealtyTrac Inc. data. Foreclosures in the MSA increased 6.3 percent from June but fell 31.6 percent from the previous July.
The latest $1 billion in Neighborhood Stabilization Program funding is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act and follows some $6 billion in similar funding in recent years. The two other rounds of Neighborhood Stabilization Program funding came with the Housing and Economic Recovery Act of 2008 ($3.92 billion) and the American Recovery and Reinvestment Act of 2009 ($2 billion).