Tuesday, November 22, 2005

Hurricane Defaults In The Pipeline

The Associated Press reports on the pending delinquencies due to the hurricane season. "Commercial mortgage-backed securities delinquencies are rising in the wake of hurricanes Katrina and Rita, after declining for most of the past year. Though not a surprise given the storms, the uptick in delinquencies nonetheless has thrown something of a wrench in long-term forecasts for the commercial mortgage-bond industry."

"Of the 190 loans that were newly delinquent in October, 119, or 62.6 percent, are located in Florida, Louisiana, Mississippi and Texas, all states affected by the recent hurricanes, RBS Greenwich said. Louisiana alone accounted for $266.7 million, or 25.8 percent, of the $1.03 billion in new 30-day delinquencies in October, the report said. Texas is close behind with $265.1 million, or 25.7 percent, followed by Mississippi with $71 million, or 6.9 percent and Florida with $62 million, or 6 percent."

"Multi-family loans, or loans backed by dwellings built for several families, saw fixed-rate delinquencies rise to 2.59 percent in October from 2.14 percent in September, the RBS Greenwich report said. In hurricane-affected areas, 63 percent of delinquent loans are secured by multi-family assets. 'This is not surprising given the large renting populations in states such as Florida and Texas and the generally lower percentages of office properties, for example, in states like Mississippi and Louisiana,' RBS Greenwich noted."

"Fitch Ratings, on the other hand, said in its report for October that it has not yet seen an increase in its commercial mortgage backed securities delinquencies, but said that is because the ratings agency only measures delinquencies of 60 days or more. Based on those criteria, 'the first time you'll see a big uptick (in delinquencies) is November,' Bach said."

"Fitch rates about $285 billion in commercial mortgage backed securities. Of that, roughly $2.4 billion has some exposure to Hurricane Katrina, Bach said. In the entire commercial mortgage-bond universe, about $4.4 billion in loans have some exposure to Hurricane Katrina, Bach said."


At 5:59 PM, Blogger Chip said...

While this is not particularly useful for this post, as a Southron I point out that Mississippi and panhandle Florida (and presumably Alabama) have put the least post-hurricane burden on the U.S. taxpayers. That is because these states are populated by people who believe they are responsible for their own welfare. This kudo excludes most of non-panhandle Florida, including central Florida, where I live. Long live the South -- we do not suck off another's teat. It never was about slavery -- it was about independence.


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