Disparate Trends for Recovery Rates Persist into Fourth Quarter
Monday, February 14, 2011
Source: Globe St
Globe St reports: A recent article on GlobeSt.com was able to both summarize Real Capital Analytics’ (RCA) latest analysis on Recovery Rates for the fourth quarter of 2010, but also obtain additional insight from the firm’s global chief economist Dr Sam Chandan. The quarterly report revealed the final three-month period of 2010 furthered several unique trends regarding lenders' recovery rates of original first loan amounts originated on a properties that had subsequently been defaulted on. The article paraphrased RCA’s report in stating, “Despite the fact that special servicers are liquidating bad loans at much greater volume these days, recovery rates have held the line, averaging 65% in the fourth quarter of 2010 compared to 64% in Q3.”
Dr Chandan remarked that the volume of very poor-quality loans have been offset by a large share of loans being recovered at- or above-origination value, especially those backing properties in the nation’s leading markets such as New York, Los Angeles, Chicago, and San Francisco. He also commented on the variation in relationships between lender types and recovery rates. For instance, insurance companies have been most successful in recovering original loan amounts, at 82%, while domestic banks have posted an average recovery rate of 63%.
For more on recovery rate trends as reported by RCA, please see the full article on GlobeSt.com.
View the full article on Globe St: Disparate Trends for Recovery Rates Persist into Fourth Quarter
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Posted by: Nina Turner