Thursday, December 22, 2011

Real Estate Weekly - $11 billion down the drain

Nearly $11 billion dollars went down the drain during the hey day of the mid-2000s real estate boom as prospecting developers delved into an easy flow of cash to finance projects that were based more on bright ideas than basic fundamentals.

A total of 3,196 commercial mortgage-backed securities (CMBS) conduit loans totaling nearly $24.6 billion have resolved with losses since January 2010, according to the latest data from Trepp’s November Loss Analysis report.

The liquidations – from loans made in 1996 through 2008 – resulted in nearly $10.7 billion in losses, with an average loss severity of 43.48 percent.

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