Special Servicers Take On $82bn in CMBS Loans through Q110: Fitch

The amount of loans in commercial mortgage-backed securities (CMBS) in need of special servicing totaled $81.7bn in Q110, up from $74bn at the end of 2009, according to Fitch Ratings. Special servicers have unique processes in place for unusual loans, usually ones on the verge of default. According to Fitch, these companies are still adding staff to meet the increasing demand. The analytics firm, Trepp, found the delinquency rate in CMBS reached 8% in April – a new record. Stephanie Petosa, managing director at Fitch, said the special servicers are now engaging in bulk note sales. They’re also modifying the loans into higher rated notes and providing forbearance, in what is known as the “extend and pretend” strategy. “However,” she said, “the majority of the loan workouts remain within the more traditional realm of extensions, modifications and foreclosures.” To explore more about the trials and tribulations of the commercial real estate market, pick up the June issue of HousingWire magazine. Write to Jon Prior.