Excerpt from: Commercial Real Estate Loan Tips
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| February 16, 2005 | | Commercial Mortgage Loans Written Ten Years Ago Are Ballooning | Ten years ago over $25 billion worth of CMBS loans (Commercial Mortgage Backed Securities) were written, and these older loans are now maturing.
Another wave of CMBS loans, with five-year lock-out clauses (which prohibit prepayments), are now free to prepay. Even though these loans are still subject to a painful defeasance prepayment penalty, experts say that 10% of them will still prepay, typically in the 4th through the 7th year.
As a result, CMBS lenders expect a banner year.
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