Nearly half of commercial mortgage lenders in the United States might be underwater at the end of 2010, as no positive signs of recovery have been seen in the sector during the first quarter of the year.
The delinquency rate on US commercial mortgage-backed securities is rising and might hit a double-digit number. Since delinquency rates continue to grow, lenders are looking into new approaches.
Kevin Levine, executive vice president of Strategic Asset Services, which offers commercial loan modification services to various clients around the country, said that the situation has changed dramatically in the past two years that many lenders are now welcoming their services.
The US government is planning to implement necessary measures, and the problem is being discussed in the House of Representatives Committee on Financial Services.
Meanwhile, more and more tenants are now leaving multifamily spaces, retail centres and office buildings. Several banks are also about to start foreclosure proceedings, and balance sheets of some lenders are beginning to strain.