Moody’s: CMBS delinquencies up to 9.24% in July

The delinquency rate on home loans within commercial mortgage-backed securities rose 22 basis points to 9.24% in July, according to Moody’s Investors Service. The rate stayed higher than 9% each month this year. For July 2010, the delinquency rate was 7.89%. Moody’s delinquency tracker showed mortgages in arrears rose in July in all but two vintages between 2000 and 2008. The rate for loans originated in 2003 fell six basis points, and mortgages written in 2008 inched lower by one bps. Meanwhile the delinquency rate in July for mortgages from 2001 rose by 795 basis points to 33.78%, due to a decline in the overall balance with only 18% of vintage balance still outstanding, according to Moody’s. Analysts said an $835 million increase to $55.6 billion in the delinquent loan balance in July pushed the delinquency rate higher, and there weren’t any new CMBS issues last month to help offset loans that defaulted or were paid off. The level of CMBS outstanding in the conduit/fusion universe consequently shrank by $5.1 billion. Moody’s specially serviced loan tracker fell five basis points to 12.3% in July, marking the third consecutive monthly decline. Analysts said the 306 basis point spread between the CMBS delinquency tracker and the specially serviced tracker is the lowest since August 2009. “Given the elevated specially serviced loan rate and continued economic uncertainty, CMBS delinquencies are likely to remain in the high single-digit range for the near term,” according to Tad Philipp, Moody’s director of commercial real estate research. While the delinquency rate for hotels fell 76 basis points to 15% in July, the delinquency rates for both office and retail mortgages rose. Office delinquencies increased to 7.59% from 7.04% in June, and retail delinquencies climbed to 7.37% from 7.16%, according to Moody’s. Nevada continues to have the highest delinquency rate of the 50 states at 20.38%, nearly two and a half times the national average, Moody’s analysts said. The Silver State’s delinquency rate fell by more than 2 percentage points in July from 22.7% the prior month, driven by a 9 percentage points improvement in Las Vegas. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw