US CMBS 'not fixed'

Category: CMBS ABS

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Wave of CMBS litigation may arise from systemic sector problems

US CMBS litigation is currently in the spotlight, with one of the largest ever US fraud investigations looking at a potential conspiracy by employees of Morgan Management (SCI 8 June) to fraudulently obtain US$167.5m of loans, some of which back a number of CMBS transactions. Unfortunately, cases such as these may only become more frequent, with a range of issues in both pre- and post-crisis transactions increasing the possibility of severe losses for borrowers and bondholders.

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