Foreclosures Rise in Commercial Property---and Single Family Homes

According to new data from Real Capital Analytics, the
default rate for commercial real estate loans owned by the
nation’s FDIC-insured banks increased from 3.83 percent in
the fourth quarter of 2009 to 4.17 percent in the first
quarter of 2010.

Real Capital says this is the highest default rate reported
since 1992, the first year for which data is available, when
it was 4.55 percent. Year-over-year, the default rate is up
by 192 basis points. By contrast, at its cyclical low in the
first half of 2006, the commercial mortgage default rate was
0.58 percent.

As of the first quarter of this year, $45.5 billion of
bank-held commercial mortgages were in default, according to
Real Capital’s tally.
The research firm segregates multifamily apartment loans
from the broader category of commercial mortgages, which
includes hotel, office, retail, and industrial. In the first
quarter of this year, the default rate on multifamily
mortgages held by banks hit 4.62 percent, up from 4.41
percent the previous quarter, and the highest level on
record going back to 1992. In total, $9.9 billion of
bank-held multifamily mortgages were in default last
quarter.

A separate study released this week by Trepp LLC shows that
the share of past due loans held by investors in commercial
mortgage-backed securities (CMBS), including those already
in foreclosure and REO, jumped 40 basis points in May to
8.42 percent – the highest in the history of the CMBS
industry.

For seven of the last eight months, the rate of increase in
CMBS delinquencies has been between 37 and 49 basis points
in Trepp’s study. The only exception was February of this
year when the delinquency rate nudged up only 22 basis
points.
To put the delinquent CMBS universe into perspective, Trepp
says that just six months ago, the delinquency rate was 5.65
percent. One year ago, it was 2.77 percent.

The risk assessment and analytics firm notes that results
were mixed across the varying property types. In May, the
industrial sector was the only one to post a decline in CMBS
delinquencies, dropping from 3.44 percent in April to 3.34
percent. Hotel delinquencies claimed the biggest jump, up
129 basis points to top out above 18 percent.

If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....

American Eagle Realty
www.american-eagle-realty.com
502-969-1801