Tag Archives: Moody’s

Mortgage delinquencies rose to 6.62 percent in August, according to a report from CreditForecast.com, supported by Moody's Analytics and Equifax. This is up from 6.54 percent in July. Delinquencies for both first mortgages and home equity loans posted increases for the month, rising to 6.85 percent and 4.14 percent, respectively. However, the CreditForecast.com report predicts the delinquency picture will improve later in the year with a return of economic growth.

The delinquency rate on loans in U.S. commercial mortgage-backed securities (CMBS) rose 22 basis points in July to hit 9.24 percent, according to Moody's. The increase follows two months in which delinquencies edged lower, and marks the seventh consecutive month the rate has come in above the 9 percent mark. The balance of loan delinquencies increased by $835 million last month. Moody's says CMBS delinquencies are likely to remain in the high single-digit range for the near term.

In the month of June, U.S. commercial real estate prices rose 0.9 percent, according to the latest Moody's/REAL Commercial Property Price Indices released Monday. June is the second consecutive month of price gains. The ratings agency says the increase represents a firming up of the market bottom, but turmoil in the capital markets and a drop-off in secondary market lending may delay realization of any significant near-term pricing gains. Sales of distressed properties accounted for 29 percent of June's volume.

Investigators are looking to determine whether Standard and Poor's (S&P) over-rated dozens of mortgage-backed securities prior to the financial crisis. The Securities and Exchange Commission has been investigating the matter for several months, and the Justice Department recently joined the investigation, according to media reports. The federal probe began before S&P downgraded the U.S. credit rating from triple-A status to double-A status. The SEC has reportedly also been investigating Moody's in regards to two mortgage-bond deals.

Congress' last-minute accord to avert a default wasn't enough to save the United States' top rating from Standard & Poor's. The agency downgraded the long-term credit rating of the U.S. to AA+, a grade just below the AAA rating the U.S. had held for 70 years. Analysts were expecting a temporary spike in Treasury yields, which are closely tied to mortgage rate trajectories, but investors responded with a rush on Treasuries, pushing yields down 13 basis points. Fannie Mae, Freddie Mac, and the Federal Home Loan Banks also had their S&P ratings lowered to AA+ on Monday.

Sales prices of commercial real estate properties rose 6.3 percent in May, according to Moody's Investors Service. The agency's latest reading marked the first positive move in its property price index in six months and the largest one-month increase since Moody's began tracking commercial real estate prices in 2000. The firm's analysts attribute much of the turnaround to an increase in prices of distressed transactions, which rose 4.8 percent during May.

For some borrowers, negative equity can become their rationale to stop making mortgage payments. The risk of such strategic default is rising among loans that have ""always performed,"" according to the credit analysts at Moody's Analytics. The agency found that these always-performing loans tend to be concentrated in robust housing markets that have held home values above the national average, but it's these areas where we may soon see a renewed increase in strategic defaults.

Commercial real estate prices (CRE) in the U.S. declined in April by 3.7 percent, according to a new report from Moody's Investors Service. It marked the index's lowest level since its inception, but Moody's says the price recovery that began a year ago among ""trophy properties"" in the largest markets is still evident and continuing. However, this decrease is the index's fifth consecutive decline with distressed prices negating the price recovery seen in larger, higher quality assets.

The delinquency rate on loans included in commercial mortgage-backed securities (CMBS) fell four basis points in May to 9.18 percent, according to Moody's. The dollar balance of past due loans was approximately $56 billion. While loans totaling $3.4 billion became newly delinquent, previously delinquent loans totaling $4.1 billion became current, worked out, or were disposed. The top 25 metros continue to outperform the broader market with a delinquency rate of 8.48 percent, 70 basis points below the national average.

As it peels back the layers of the secondary market to delve deeper into the trading of the subprime mortgage bonds reputed for setting off the financial crisis, the Securities and Exchange Commission (SEC) has set its sights on major credit ratings agencies. The SEC is considering bringing civil fraud charges against Standard & Poor's and Moody's Investors Service for their role in positioning mortgage-backed securities that held a high risk of default as grade-A investments.