Up until recently, lenders and special servicers have done little to deal with the mounting volume of distressed mortgages in CMBS pools because it is so difficult to get all interested parties on the same page. But now the sheer volume of distress is forcing their hand.
In March, the unpaid balance on CMBS loans transferred to special servicing reached a trailing 12-month high of $79.83 billion, of which retail loans accounted for about 25 percent of that total, according to Realpoint LLC, a Horsham, Pa.-based credit rating agency.
Overall, special servicers remain reluctant to liquidate distressed loans because that would mean selling foreclosed properties at a loss. So far this year, the loss severity on liquidated retail loans has averaged 47.9 percent, according to Realpoint.
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