Question: In an article by Matt Hudgines More CMBS Borrowers Pay

In an article by Matt Hudgines “More CMBS Borrowers Pay off Balloon Mortgages on Time,” posted on August 18, 2010, the following appeared
“Some 49.9% of the securitized loans that matured in July successfully met their balloon payments, according to New York-based Trepp LLC, which closely tracks the commercial mortgage-backed securities (CMBS) market. That’s up more than 11 percentage points from 38.7% the previous month and is the highest level since the end of 2008.”
Later in the article, the following appeared:
“Until the fourth quarter of 2008, when financial markets experienced a meltdown following the bankruptcy of Lehman Brothers, the monthly average for the number of on-time, paid balloon payments was more than 70%, according to Trepp. Since the beginning of 2009, there hasn’t been a month when even half of the borrowers with CMBS loans reaching maturity were able to make their balloon payments. The average percentage for the past 12 months has been 32.2%.”
(See: http://nreionline.com/finance/news/cmbs_borrowers_pay_balloon_mortgages_0818/#)
Explain the relevance of this information to investors in CMBS.


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  • CreatedAugust 22, 2015
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