Economics, Econometrics and Finance
8 years ago

Commercial mortgages at risk as lenders struggle to assess default accurately.

SSRN Electronic Journal
Commercial Mortgage Underwriting: How Well Do Lenders Manage the Risks?
Robert A. Grovenstein, C. F. Sirmans, John P. Harding, Sansanee Thebpanya, Geoffrey K. Turnbull

Paper Summary

Commercial mortgage lenders traditionally use loan-to-value and debt service coverage ratios to assess default risk. Recent studies on commercial mortgages have questioned the role of loan-to-value ratio in predicting defaults, with some finding no clear relationship or even a negative one.

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