According to reporting by Morningstar Credit Ratings LLC, commercial real estate mortgage borrowers with maturing loans paid them off at a slower rate as of May 2017. Peter Grant of the Wall Street Journal suggests this slower payoff rate, and the ensuing swell in delinquent/unpaid loans, can be at least partly attributed to 10-year mortgage loans taken out by borrowers in 2007, which got repackaged into commercial mortgage backed securities (CMBS). This mass of maturing debt, which many are referring to as the “Wall of Maturities,” is coming due and many people are concerned about the effect it may have on the real estate market, as well as the economy as a whole.
We all remember the mess that was created, and exacerbated, by the high risk lending that was prevalent across the country ten years ago. Continue Reading