{"id":1004133632,"date":"2015-12-16T10:35:45","date_gmt":"2015-12-16T18:35:45","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004133632"},"modified":"2022-12-07T20:53:32","modified_gmt":"2022-12-08T04:53:32","slug":"feature-loan-changes-in-u-s-cmbs","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/feature-loan-changes-in-u-s-cmbs\/","title":{"rendered":"Feature: Loan Changes in U.S. CMBS"},"content":{"rendered":"

By Keith Loria, Contributing Editor<\/em><\/p>\n

\"Stephanie<\/a>

Stephanie Petosa, Managing Director, Fitch Ratings<\/p><\/div>\n

Fitch Ratings, in its latest weekly U.S. CMBS newsletter, reveals that loans are being dropped from new U.S. CMBS pre-securitization at an increased rate.\u00a0According to the report, loan changes in U.S. CMBS deals are not only taking place after a deal closes but before it securitizes, as well.<\/p>\n

\u201cFitch is seeing an increasing number of loan changes between the initial data tape and final tape,\u201d Stephanie Petosa, Fitch Ratings\u2019 managing director, said in the report. \u201cWhile it is not unusual for a pool to change from initial proposal to final pool cut, Fitch notes that the number of iterations have increased materially over the past 12 months.\u201d<\/p>\n

In a sample of 28 Fitch-rated deals for the\u00a012-month period ending June 30,\u00a02015, the rating agency\u00a0looked at nearly 1,000 loans that were dropped, representing approximately 30 percent of the final transaction amount. The majority of these \u201cdropped loans\u201d were under $20 million.<\/p>\n

\u201cLarger loans that drop from pools will have a more significant impact on the overall deal metrics, including Fitch loan loss estimates that drive credit enhancement,\u201d the report noted. \u201cThat means pools experiencing a sizable number of large loan drops may have significantly different credit characteristics and, as such, credit enhancement between Fitch\u2019s initial feedback and when expected ratings are published.\u201d<\/p>\n

The report explains that it is not unusual for loans to be dropped from a pool, citing several rationales:\u00a0A property may experience last-minute changes to its tenancy, including the borrowers not securing signed leases in time; competition from other lenders providing more favorable loan terms; or simply a need to reshape the loan pool to\u00a0provide better property, geographic and originator diversity.<\/p>\n

\u201cOften a loan is dropped from one pool, only to reappear in a subsequent pool as the cause for the delay is remedied,\u201d Petosa said. \u201cHowever, Fitch is concerned that the numerous loan drops could indicate a lack of lender due diligence prior to sending the initial loan information to rating agencies and\/or B-piece buyers.\u201d<\/p>\n

Additionally, there seems to be anecdotal talk that some originators may be using B-piece buyers and rating agencies as initial providers of credit feedback; less favorable feedback indicates to the potential originator that it\u2019s not worth proceeding with the loan process.<\/p>\n

Therefore, as part of its originator reviews in 2016, Fitch will be asking originators for the depth of their due diligence efforts for loans that appear on the initial tape, accompanied by a one-page asset summary.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Keith Loria, Contributing Editor: What does an increase in dropped loans from new U.S. CMBS pre-securitization mean for the rating agencies’ review process in 2016?<\/p>\n","protected":false},"author":451,"featured_media":1004133789,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,37753,23891],"tags":[],"class_list":["post-1004133632","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-research-center-finance","category-national"],"acf":[],"yoast_head":"\nFeature: Loan Changes in U.S. CMBS - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/feature-loan-changes-in-u-s-cmbs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Feature: Loan Changes in U.S. CMBS\" \/>\n<meta property=\"og:description\" content=\"By Keith Loria, Contributing Editor: What does an increase in dropped loans from new U.S. CMBS pre-securitization mean for the rating agencies' review process in 2016?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/feature-loan-changes-in-u-s-cmbs\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-12-16T18:35:45+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T04:53:32+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/12\/Stephanie-Petosa1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"805\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Keith Loria\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/\"},\"author\":{\"name\":\"Keith Loria\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/aaa29b723dad85f2444ae3cb0c4d735f\"},\"headline\":\"Feature: Loan Changes in U.S. CMBS\",\"datePublished\":\"2015-12-16T18:35:45+00:00\",\"dateModified\":\"2022-12-08T04:53:32+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/\"},\"wordCount\":432,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2015\\\/12\\\/Stephanie-Petosa1.jpg\",\"articleSection\":[\"Finance\",\"Finance (Research Center)\",\"National\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/feature-loan-changes-in-u-s-cmbs\\\/\",\"name\":\"Feature: Loan Changes in U.S. CMBS - 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