Secondary Market

The 29 basis-point (bp) increase in delinquencies to 6.26 percent at the end of February was driven in large part by upcoming maturities from U.S. commercial mortgage-backed securities (CMBS) deals originated in 2005, according to Fitch Ratings. The agency says these five-year loans will have difficulty refinancing this year as liquidity remains limited, and warns that in many cases, sponsors will have to either contribute additional equity or look to their servicers for extensions and modifications.

Investment bank KBW, Inc. is bolstering its real estate business with the addition of Michael Errichetti as managing director and head of its real estate investment banking team. Errichetti previously spent over 25 years at JP Morgan, advising clients and raising capital for large real estate transactions.

One of the nation's most visible and vocal lawmakers has cast some doubt on the safety of doing business with the nation's two largest mortgage financiers, Fannie Mae and Freddie Mac. Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, issued a public statement Friday which essentially warns investors that have lent money to the two GSEs and those that have purchased their mortgage-backed securities (MBS) to expect to incur some losses.

CB Richard Ellis Group, Inc., a commercial real estate services firm headquartered in Los Angeles, announced Friday that is has promoted Gil Borok to CFO. He takes over the CFO responsibilities from Bob Sulentic, who will continue as president of the company.

It's no secret that for quite awhile commercial real estate (CRE) transactions, including distressed assets, have been at a standstill. But according to a new study by the global advisory firm AlixPartners, that could all change in 2010. In fact, the firm's findings suggest that investment opportunities in the commercial sector could be bigger in the months ahead than even in the heady days of the early 1990s.

DebtX, a Boston-based loan sale advisor, recently announced that it plans to sell two portfolios of nonperforming loans, totaling more than $410 million - one for HUD and one for a lender in the western U.S. The company also reported that commercial real estate loan prices increased in January.

Past due loans within commercial mortgage-backed securities (CMBS) rose 23 basis points in February, according to a new report from Trepp LLC. The firm noted that it's the smallest month-to-month rise since September 2009. The brief reprieve is welcome news for an industry struggling with rising defaults and looming loan maturities, but that's tempered by a quick reminder from Trepp that CMBS delinquencies are still setting new records as the highest the industry has seen since the CMBS market took hold.

The FDIC has built up a stockpile of some $40 billion in underperforming real estate loans and other assets seized from failed banks over the past couple of years. The federal agency is a regulator and deposit insurer, not an asset manager, and it doesn't like to hold on to these loan leftovers for very long. But the agency's asset portfolio is growing faster than it can conduct auctions and offload these loans. That's led the FDIC to try a new tactic - package the loans and sell them to investors as securities on the secondary market.

The nation's largest mortgage financier says it will purchase up to 200,000 seriously delinquent loans from mortgage-backed securities (MBS) holders this month. As of the end of last year, Fannie's single-family MBS loans that were considered seriously delinquent totaled $127 billion. The GSE says after its March buybacks, it will continue purchasing loans in each of the subsequent few months until the company has ""substantially reduced"" the population of loans that are four or more months delinquent.

The Securities Industry and Financial Markets Association (SIFMA) is now carrying price data for approximately 25,000 federal agency bonds on its Investing in Bonds Web site. The new data is available via a feed from the Financial Industry Regulatory Authority (FINRA) following an expansion of its Trade Reporting and Compliance Engine (TRACE) to include debt issued by federal government agencies, government corporations, and the GSEs.