Dr Chandan's Lead Indicator: "Banks' Commercial Mortgage Default Rates Fell--Now What?"
Commercial Observer reports: In his latest Lead Indicator column, Dr Sam Chandan broke some very encouraging news for commercial real estate investors and lenders: the default rate for commercial real estate mortgages fell in the past quarter for the first time this cycle. “The default rate for commercial real estate mortgages held by the nation's depository institutions-including mortgages at least 90-days delinquent and mortgages in non-accrual status-fell to 4.28 percent in the fourth quarter 2010 (Q410), down from 4.36 percent in the third quarter,” stated Dr Chandan.
The default rate for multifamily loans also fell. However, while the balance of defaulted commercial loans fell by nearly $1.0 billion in Q4’10, it still stands at $45.8 billion. Therefore, Dr Chandan made it clear that “while the new results can be greeted with cautious optimism, it is clear that legacy challenges have yet to abate for many institutions.”
For his full review of defaulted commercial and multifamily mortgage trends through the fourth quarter of 2010, as well as continued implications for credit availability, please see Dr Chandan’s full article on the Commercial Observer’s site.
View the full article on Commercial Observer: Dr Chandan's Lead Indicator: "Banks' Commercial Mortgage Default Rates Fell--Now What?"
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