The nation's banks are looking at a robo-signing problem with commercial real estate which may dwarf the one for home mortgages, according to a new study.
Research by Harbinger Analytics Group shows the widespread use of inaccurate, fraudulent documents for land title underwriting of commercial real estate financing. According to the report:
This fraud is accomplished through inaccurate and incomplete filings of statutorily required records (commercial land title surveys detailing physical boundaries, encumbrances, encroachments, etc.) on commercial properties in California, many other western states and possibly throughout most of the United States.
Analysts expect 2012 to be a record-setting year for commercial real estate defaults. Last week delinquencies for office and retail loans hit their highest-ever levels, according to Fitch Ratings. The value of all delinquent commercial loans is now $57.7 billion, according to Trepp, LLC. Also, while the national office vacancy rate has come down it is still very high: It hit 17.6 percent in the fourth quarter, down from 18.5 percent a year earlier, according to Jones Lang LaSalle.
Read more...Banks face crisis in bungled commercial mortgages - CBS News
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