MetLife: "The worst is to come"

MetLife Says Commercial Mortgage Defaults Will Rise (Update3)
By Andrew Frye, Carol Massar and Hugh Son

June 10 (Bloomberg) -- MetLife Inc. Chief Investment Officer Steven Kandarian said commercial mortgage defaults will rise in the next two to three years after the economic slump subsides.

“The worst is to come,” Kandarian said in an interview today with Bloomberg Television in New York, where the biggest U.S. life insurer is based. “Typically there’s a lag between when the economy softens and when the defaults actually occur.”

The default rate on commercial mortgages held by U.S. banks may rise to 4.1 percent, the highest in 17 years, by yearend as debt for refinancing remains scarce and the recession drags down rents, research firm Real Estate Econometrics LLC. said yesterday in a report. Kandarian, whose portfolio contains about $36 billion in loans on commercial property, said he expects delinquencies for MetLife will be “relatively small.”

Read More Here: http://www.bloomberg.com/apps/news?pid=20601087&sid=aoyMd8TReXo8