Distressed

Any impact from the coronavirus outbreak on commercial and multifamily loan delinquencies won't be known for some time, the Mortgage Bankers Association said.

The delinquency rate for commercial mortgage-backed securities ended 2019 at its lowest point in nearly 11 years, aided by increased issuance and the resolution of legacy transactions, Fitch Ratings said.

The owner of the MacArthur Center Mall in Norfolk, Va., has defaulted on a $750 million loan which includes the property as collateral.

The share of severely underwater mortgages shrunk by over two percentage points compared with a year ago, as these borrowers benefited from the rise in equity levels, Attom Data Solutions said.

GameStop's plan to shutter up to 200 stores could adversely affect commercial mortgage-backed securities loans with a combined allocated property balance of almost $42 million, according to Morningstar Credit Ratings.

Freddie Mac is postponing the date it will make using its Servicing Gateway platform mandatory, and adding new requirements related to chargeoffs and interactions with document custodians.

The commercial mortgage-backed securities sector will weather the fourth quarter's slowing but steady growth in the U.S. economy, as better loan performance counters a continued decline in volume, Morningstar said.

While delinquent loans in commercial mortgage-backed securities continued trending downward overall, there was an uptick in the rate for more recent originations, a Standard & Poor's report noted.

Foreclosure activity fell 21% in July compared to a year ago and rose 6% from June after twelve consecutive months of declines, according to Attom Data Solutions.

Increased consumer debt and the threat of an economic downturn increase the default risk for government-sponsored enterprise mortgages during the first quarter, according to Milliman.

While seasonal factors were attributed to the monthly rise in mortgage delinquencies for June, the jump was still much higher than last year's fairly steady increase, according to Black Knight.

Life insurance companies increased their mortgage investments to levels higher than historical norms, creating more potential danger for their portfolios in the event of a real estate downturn, a Fitch Ratings report said.

Although the performance of the government-sponsored enterprises' single-family loans continues to improve, the deeply delinquent totals remain significant in states with court-processed foreclosures.

The large number of overleveraged commercial mortgage-backed securities loans coming due in 2019 is likely to cause the payoff rate to drop an additional 9 percentage points by December, a Morningstar report said.

Private-label mortgage securitizations with variable servicing fee arrangements could become more common going forward as issuers look to increase investor cash flow while reducing the loan servicer's economic exposure, Fitch said.

Freddie Mac's latest nonperforming mortgage auction will include one pool targeted to smaller investors like nonprofit organizations.

Caliber Home Loans settled a grievance with the Massachusetts attorney general over allegations of providing distressed borrowers with unaffordable loan modifications.

Controlling classes of investors in commercial mortgage-backed securitizations can replace a special servicer, but before they do, they should make sure the long and potentially expensive process is worth it.

Loans in commercial mortgage-backed securities originated after 2009 by nonbank lenders have a significantly higher default rate than those originated by banks, a Fitch Ratings report said.

As the government shutdown enters its third week, mortgage servicers are activating the response plans they normally use during hurricanes and wildfires to assist federal workers who may have trouble paying their mortgages.