The delinquent unpaid balance for commercial mortgage-backed securities (CMBS) in June increased to $60.49 billion, up from $60.3 billion in May and $58.37 billion in April, according to new data from Morningstar Credit Ratings LLC.
Morningstar reports that since June 2011, the delinquent unpaid balance has increased in seven of the subsequent 12 reporting periods through last month. Furthermore, the total unpaid balance for CMBS available for review for the June remittance period increased to $712.9 billion from $706.7 billion a month prior.
Last month's delinquency ratio was 8.48%, down from 8.53% a month prior but up from the 8.22% reported in June 2011. In addition, this ratio is almost 30 times the Morningstar recorded low point of 0.283% in June 2007. The delinquent unpaid balance of $60.49 billion in June is down only 1% from $60.86 billion in June 2011, but remains over 27 times the low point of $2.21 billion in March 2007.
‘The movement in both delinquent unpaid balance and percentage continues to be impacted by the size and amount of loan liquidations, modifications, extensions and resolutions reported on a monthly basis, along with new balloon maturity defaults,’ says Morningstar. ‘These items, as a whole, should lead to continued volatility in delinquency levels for the remainder of 2012.
‘A denial by special servicers of borrower requests for loan extensions, modifications or debt restructuring, or a decision by borrowers to surrender the collateral, is still a legitimate concern throughout 2012,’ Morningstar adds. ‘Based upon this concern and despite the ongoing liquidation activity experienced over the trailing 12 months, the delinquent unpaid balance for CMBS still has the potential to reach 9 percent in 2012.’