– by Rob Seidenwurm
A recent Morningstar report offered good news! A full 61% of the CMBS loans that matured in February, 2015 paid off on time. Further, they project 70% of the loans in the rest of 2015 to pay off on time. Again, this was touted as good news.
Further, the analysis continues to note that many loans that are current and matured pay off within 6 months of maturity.
As they say in the NFL, Upon Further Review, these results do not portend to anything but a crisis. Even if ½ of the loans that have matured pay off without problems, that leaves 15-20% of the maturing loans as “Problems.”
To pretend that these numbers represent a positive uptick is whistling in the graveyard at best, and repeating the problems of the last downturn at worst. At 1stService Solutions, we try to get ahead of these issues and address them head on to help alleviate the extent of the pending crisis. Reporting these numbers as positive produces an opposite result.