Almost $150 Billion at Risk over the Next Three Years
DALLAS, TX(April 22, 2015)–1stService Solutions, an industry leading commercial real estate loan owner advocate and refinance firm, has some sobering news to share about the future of maturities in the commercial mortgage backed security (CMBS) loans. Recent facts and figures are confirming what 1stService Solutions executives are already seeing on the ground—a rising percentage of borrowers unable to pay their loan off at maturity.
Feeding into this perfect storm of predictable loan defaults is the 10-year window of repayment for CMBS loans originated during the 2005-2007 time frame, aided by fast and loose underwriting parameters just prior to the great recession.These loans are now coming due and borrowers holding these CMBS loans won’t come close to meeting their obligations, leading them to seek relief in the only possible avenue loan restructuring.It’s either that option, or foreclosure.
“90 percent of our [2015] first quarter new restructure requests were due to maturity issues, and we’ve had a huge uptick in business over the first quarter of 2014,” reports Ann Hambly, founder and CEO of 1stService Solutions. “Looking out at the next three years of maturing CMBS loans, metaphorically speaking, is like viewing an incoming tsunami from the shoreline.There is real trouble out there and it needs to be dealt with accordingly.And unfortunately, there are very few companies who approach loan restructuring with advocacy on the borrower’s behalf.”