Fitch views the presence of a mortgage servicer (Wells Fargo & Company, Issuer Default Rating A+/Outlook Stable) pursuant to the securitization of the underlying mortgage
loan on the mall project as a favorable credit factor.
The underlying mortgage
is secured by a retail condominium located on North Rush Street in the prestigious Gold Coast district of Downtown Chicago.
Generally, investors in a CMBS prefer that underlying mortgage
notes are not unexpectedly paid off, as this can affect the value of the CMBS and leave investors open to pricing manipulation.
Rather than reopening the underlying mortgage
, the cases were filed as new civil actions.
The firm said it believes this credit reserve appropriately factors in remaining uncertainties regarding underlying mortgage
performance and the potential impact on future cash flows.
In a ruling, US district judge, Jed Rakoff, has ordered Flagstar Bancorp Inc (NYSE: FBC) to pay USD90m to Assured Guaranty Ltd (NYSE: AGO) in a dispute related to loans underlying mortgage
backed securities valued at USD900m
It also could be argued that, in most cases, its credit risk is less than the underlying mortgage
(absent repurchase risk).
So if a buyer assumed an underlying mortgage
from the homeowner, or paid transfer taxes that are usually paid by the seller, that amount would now appear as part of the total price.
Less than 5 percent of the underlying mortgage
pool was expected to go bad, when a Moody's analyst in 2006 first rated the risk of the security.
"Fitch published a note on September 18 in which they confirmed that the underlying mortgage
collateral of the Granite trust still remains strong.
(27) The senior mortgage loan is typically secured by income-producing real estate owned by the underlying mortgage
"In addition, the BBA indicated that seasonally-adjusted underlying mortgage
lending amounted to pounds 5.6 billion in January.