Cumulative Defaults on CMBS Inch Up During Q1 via GlobeSt.com

Although the long-term pace of CMBS defaults is moderating, delinquencies in securitized mortgages are far from a thing of the recent past. Fitch Ratings said Friday that the cumulative default rate among CMBS crept up 25 basis points to 12.96% during the first quarter of this year, while a few days prior, the latest Monthly CMBS Delinquency Report from Morningstar found that the delinquent unpaid balance for CMBS increased by $1.71 billion during March, the first reported increase since October 2011.

Over the past year, the delinquent unpaid balance has vacillated—by $1 billion or more—between increases and decreases on a month-to-month basis, with the balance decreasing in seven of the preceding 12 months. Morningstar attributed this to “an overall trend of volatility” seen in legacy CMBS.

For its part, Fitch says the cumulative default rate would reach 15.42% if loans that did not refinance at maturity were included. The agency expects the pace of new defaults this year to be “relatively stable” compared to ‘11 levels. Newly defaulted loans for Q1 totaled $1.7 billion, or 155 Fitch-rated loans.

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