KIC000025 - • • • CMBS FIN 428 Prof Hood Commercial Mortgage loans o Commercial mortgage loans are for income-producing properties o These

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Unformatted text preview: • • • CMBS FIN 428 Prof Hood Commercial Mortgage loans o Commercial mortgage loans are for income-producing properties. o These properties include i. multifamily properties ii office buildings iii. industrial properties (including warehouses) iv. shopping centers-e. hotels vi health care facilities o Commercial mortgage loans are non-recourse loam. o This means that the lender can only look to the income- producing properly backing the loan for interest and principal repayment. '~ < ¥ )'T '¢ 1 l{!:iO W P """, , ,~ ~ , "',. r"""ohho'" F"",>io< '-'011 Commercial Mortgage Loans (continued) o Indicators of Potential Performance o If there is a default on a commercial mortgage loan, the lender looks to the proceeds from the sale oftbe property for repayment and has no recourse to the borrower for any unpaid balance. o Two measures have been found to be key indicators of the potential credit performance: i. debt-to-service coverage ratio .ii. loan-to-value ratio """""''fi'o'o"",.",,,,£<lI>Oor'''"""""''fi'o'o"",....
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This note was uploaded on 09/06/2011 for the course FIN 428 taught by Professor Hood during the Fall '11 term at Iowa State.

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KIC000025 - • • • CMBS FIN 428 Prof Hood Commercial Mortgage loans o Commercial mortgage loans are for income-producing properties o These

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