CMBS Failures Contribute to Rising Bank Failures

An article over at National Real Estate Investor relates that the delinquency rate for commercial mortgage-backed securities rose sharply in March to more than 7%.

Troubled commercial real estate and construction loans are contributing to higher bank failure rates, Trepp reports. The researcher projects that 200 banks will fail in 2010.

Many of the failures to date have occurred in Florida, Georgia and California, as well as in the rust belt markets of Illinois, Wisconsin, Minnesota and Michigan.

The banks are already feeling the effects of the highest delinquency rate in CMBS history at 7.61%. The percentage of loans 30 or more days delinquent, in foreclosure or REO, jumped 89 basis points, according to the new report.

Read the full report.

One thought on “CMBS Failures Contribute to Rising Bank Failures

  1. Is the Real Estate and resulting Bank woes the direct result of the nation’s economic foundation moving from manufacturing and heavy industry to tech and service ? Some industry names still exist here but have several decades of outsourcing, defense cuts, and protective trade agreements finally come home to roost. I did not want to sound simplistic about it but to me there has to be a root cause for the economic effects we are witnessing today.


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