Fitch: Commercial mortgage defaults to keep rising

NEW YORK — Defaults on the loans behind U.S. commercial mortgage backed securities will continue to rise through the year, Fitch Ratings said Wednesday.  The agency expects the overall rate of default for deals it has rated to exceed 11 percent by year-end.

“The aggressive underwriting and higher leverage in the 2007 vintage is leading to substantially higher default rates,” said MacNeill. Fitch predicts 10-year cumulative default rates on 2007 Fitch-rated commercial mortgage backed securities to reach 27 percent.”

That spike would follow a more than fivefold increase in loan defaults last year, to 1,464 loans totaling $17.75 billion, with 34 percent of defaults happening in the last three months of the year…click here for full story from the Associated Press…