Morningstar argues it can use undisclosed loan-specific stress adjustments for subjective reasons, including to bring the rating for a commercial MBS in line with expectations based on similar deals.

Good news for the commercial mortgage sector: CRE-related equity values are rising. Meanwhile, the MBA is optimistic about commercial real estate lending this year.

In January, Fitch reported 28 newly delinquent hotel loans totaling $564 million. Retail loans were a distant second, with 18 newly delinquent loans worth a total of $268 million.

Non-agency CMBS issuance last year sank to its lowest production level since 2012 and key real estate sectors remain under stress. But the agency multifamily MBS programs continued to grow. (Includes data chart.)

Gov. Andrew Cuomo’s 2022 budget proposal includes language that formalizes the inevitable shift from LIBOR to SOFR for most financial institutions.

Thanks to the COVID crisis, appraisal reductions in commercial MBS are rising rapidly and may be a harbinger of future loan losses, warns Kroll Bond Rating Agency.

CMBS delinquencies declined by 36 basis points to 7.81% in December, well below the peak of 10.34% in June, according to analytics provider Trepp.

Several factors will support new loan credit quality next year, including re-covering CRE fundamentals, capital market liquidity, demand for real assets and some degree of conservatism in underwriting, said Moody’s.

Issuance of rated non-agency MBS and ABS rose significantly during the third quarter, although both markets continued to lag behind 2019 on year-to-date volume. (Includes two data charts.)

The delinquency rate on commercial MBS in November slipped modestly thanks to continued COVID-related relief. The recovery ahead will be slow, particularly for the lodging and retail sectors.