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Trepp: CMBS Loan Losses to Deepen in 2010

Properties backed by CMBS loans that have had an appraisal reduction may be a financial fortune cookie for investors. Ordering an updated appraisal is just one of the steps required after a loan has been transferred to special servicing. In the current environment, most appraisals have been reduced from their original value at securitization, especially loans underwritten during the CMBS boom. “Appraisal reduction is a forward-looking measure of potential future losses,” explains Paul Mancuso, a vice president with commercial real estate data and analytics firm Trepp LLC. The New York-based researcher recently mined its database to ...

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