Clamping down on risky commercial mortgage loans

Bond rating agencies are adjusting their ratings on risky commercial mortgages, hoping to avoid a meltdown in the industry similar to what is occurring in the nation’s residential market due to the prevalence of subprime loans. “Underwriting has gotten so frothy that we have to take a stand,” said Jim Duca, a group managing director at Moody’s Investors Service. “The industry was heading to Niagara Falls.” more [NYT]