The pain in the commercial real estate (CRE) sector has yet to ease, and the sting has become glaringly evident in the secondary market for CRE debt, where investors find themselves holding unprecedented volumes of nonperforming assets. The percentage of loans at least 30 days past due in the commercial mortgage-backed securities (CMBS) universe closed out 2009 at 6.07 percent, according to Trepp LLC. That's a staggering 502 percent jump over the 1.21 percent CMBS delinquency rate just 12 months earlier.
Servicers who lower distressed homeowners' mortgage payments by reducing the principal balance are much more likely to see the payments keep coming in, according to a new study published by the Federal Reserve Bank of New York. The economists found a definite pattern that suggests "an intention among servicers to make the loans more affordable, while not losing any of the underlying principle." However, their analysis shows that modifications that trim off some of the loan balance "can double the reduction in re-default rates."
The Florida Supreme Court has instituted a statewide mediation program to open up communication between lenders and distressed borrowers prior to foreclosure proceedings in the hopes of stemming the state's raging foreclosure problem. The administrative order requires all foreclosure cases in the state courts that involve residential homestead property to be sent through a "managed" program within 120 days of filing, with lenders shouldering the cost of the mediation process.
Contract activity for pending home sales in November 2009 was a two-sided story, according to the National Association of Realtors (NAR). The trade group's Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in November, dropped 16.0 percent from October. This decline came after a surge in activity in preceding months, as first-time homebuyers rushed to beat the original tax credit deadline. While results looked gloomy month-to-month, the year-over-year PHSI jumped 15.5 percent.
| | |
DSNews.com
Comments
Post a Comment