The housing recovery is here and it cannot be stopped, only moderated, Robert Fitch, managing director and lead homebuilding analyst at New York- and London-based Fitch Ratings, told Reuters. Fitch is joining an ever-larger chorus of experts predicting the both home price and home sales will rise this year, providing that no unforeseen economic disaster strikes. (See the video after the jump)
Posts Tagged ‘fitch ratings’
Fitch Ratings has downgraded a pool of loans, including a loan at office complex Douglas Entrance, comprised of five office buildings of about 470,000 square feet at 800 South Douglas Road in Coral Gables. The loan was transferred to special servicing in April 2010, based on an eminent default, Fitch said. Chicago-based Transwestern Investment owns those properties. [more]
A $163 million mortgage loan on PGA National Resort and Spa in Palm Beach has been moved to special servicing for “imminent default,” Fitch ratings reported, according to the South Florida Business Journal. The loan was current in June, but was set to mature on Sept. 1 and had already used its last extension option, according to analysis firm Trepp. Trepp analyst Spencer Hollerith said it’s not unusual for a loan to go into special servicing a few months before it matures.
PGA National owner Walton Street Capital’s financial performance has been steady, with a 2010 net operating income of $8.1 million, a 43.6 percent improvement over the prior year, the Journal said. SPGA National had net operating income of $19.4 million and an occupancy rate of 64 percent when the loan was originated in 2006.
With interest rates poised to rise, lenders and investors in the nation’s $6.8 trillion mortgage-backed securities market will be exposed to significantly more risk, according to a new report from Fitch Ratings. The agency said yesterday that rates are likely to rise over the next several years as a result of record levels of U.S. debt and the beginnings of an upswing in 10-year Treasury yields. For investors in MBS, that means “heightened price volatility, particularly [for] those that are highly leveraged, fund through repo markets, or mark-to-market their holdings,” Fitch said. In addition, fewer Americans would be able to afford homes, leading to a proliferation of floating rate and hybrid adjustable-rate mortgages and a shift away from the popular 30-year fixed-rate mortgage. In effect, Fitch said, this would “transfer interest rate risk from lenders to borrowers, running contrary to the current public policy focus on mortgage product simplicity and consumer protection.” TRD
Fitch Ratings upgraded the issuer default ratings of iStar Financial, citing the lender’s
recently announced $2.95 billion credit agreement, which
lowered the amount of debt coming due in June.
The funds are comprised of two credit lines that will help iStar extend its debt payments
until 2013 and 2014. The Manhattan-based lender had warned of a potential collapse
unless it was able to extend the deadline on its payments. [more]
Loan modifications are declining to the point where eventual foreclosures for distressed U.S. homeowners are becoming all but certain, if somewhat delayed, according to a report from Fitch Ratings, released yesterday. Just 36,500 mortgage modifications were completed in December 2010, down from a high of 86,500 in April 2009, the report says, and Fitch says it expects the majority of those modified borrowers to default again within one year, which could lead to another spike in foreclosures. Meanwhile, short sales, deeds in lieu and other foreclosure alternatives are up slightly, and are projected to increase further in 2011. The Obama administration’s foreclosure prevention program and other efforts at promoting loan modifications “have made little more than a dent in the large volume of outstanding distressed loans,” said Diane Pendley, managing director at Fitch. “Based on current and expected inventory, it will take four years to remove the backlog of properties and return the market to balance.” TRD
Liquidity for U.S. home builders is still “generally adequate,” despite little demand for housing, according to a new report from Fitch Ratings. “Fitch is not convinced that demand will collapse further,” the report says, cautioning, though, that home builders should take note that the tax refunds they have been taking advantage of in recent years can’t be counted on to bulk up their cash flows in 2011. “It is prudent for home builders to maintain or improve their liquidity positions,” said Robert Rulla, director of Fitch. “Housing activity is likely to stay at a slow trickle through the fall.” TRD
Ratings agency Fitch has downgraded its outlook for several Miami-Dade County bonds to negative from its previous ranking of stable, citing a weak housing market among the reasons for the decreases. Some of the bonds that received the downgrade were public service tax revenue bonds and public facilities revenues bonds. Fitch said that “the county’s weakened financial profile” was greatly affected by the area’s “severely stressed housing market,” and that it expects “further fiscal deterioration” in the county if “a persisting budgetary imbalance” isn’t corrected. [SFBJ]
The Doubletree Hotel Palm Beach Gardens is in danger of “imminent
default” after significant losses in 2009, according to Fitch Ratings.
The rating firm said the hotel’s $23.5 million mortgage with a
commercial mortgage-backed securities fund originated by Barclays
Capital went into special servicing with Helois. The 279-unit Doubletree
first obtained the loan four years ago, and it is not scheduled to
mature for another year. The hotel is owned by THI IV PBG, a firm based
in Annapolis, Maryland. [SFBJ]
The Hilton Fort Lauderdale Airport is one of 14 hotels covered by a $539
million mortgage that was transferred to special servicing for
“imminent default,” according to Fitch Ratings. The loan, held by the
Columbia Sussex Portfolio and managed by Bank of America, is set to mature Oct. 15. The 388-bed Hilton Fort Lauderdale Airport is located at 1870
Griffin Road. The portfolio, which includes mostly Wyndham hotels, has
one other Florida hotel, the Westin Harbour Island in Tampa. [SFBJ]