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Lenders that liquidate defaulted commercial mortgages are recovering an average of just under 60% of the balance of those loans, Real Capital Analytics says in a new report.

The bigger picture rendered by the report contains a few surprises, not least of which is the relationship between underwriting and the rate of recovery.

“It is reasonable to expect that the more conservatively a loan was underwritten, the higher its recovery rate upon resolution,” the report states. “However, the resolutions thus far in 2009 challenge the assumption that loans originated when lending standards were the loosest and property prices were the highest will suffer steeper losses.” In fact, mortgages from 2002 and earlier have a slightly lower RR than those originated in the irrational exuberance of 2006 and 2007, even though the more recent loans have a higher default rate, says RCA.

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