Positive returns for life insurance company mortgages

Sign Up for the undefined Newsletter

After two consecutive quarters of negative returns, private commercial mortgages held by life insurance companies nationwide rebounded into positive territory during first-quarter 2009. According to the LifeComps Commercial Mortgage Index, which is based on cash flow data collected from participating life insurance companies, first-quarter 2009 finally saw a positive return of 1.63 percent following negative returns in the last two quarters of 2008. But it is unclear whether these positive numbers will hold. A Standard & Poor’s report in May showed that owners are likely to cut all other expenses before defaulting on their mortgages, so as the recession continues, there is a higher possibility for distress or defaults in the private commercial mortgage markets.