According to Fitch Ratings the delinquencies on U.S. commercial real estate loans eased in October due to increased incidence of loan extensions. The exentions helped precipitate a slight drop in CREL CDO delinquencies and, as Fitch Director Stacey McGovern explained,"are short term remedies designed to allow added time for further negotiation of pending loan modifications."
CREL CDO delinquencies fell slightly to 12.8% last month (from 12.9% in September). Total loan extensions in October were reported at 58 in the month, which is significantly higher than the 2010 monthly average of 37 extensions. Asset managers reported $98 million in realized losses from the disposal of distressed assets last month. Total realized losses across such products rated by Fitch total more than $1.7 billion. "The risk still remains for realized losses to increase if real estate trends backpedal, though they have been in a relative holding pattern for the last few months," McGovern added.
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