“The worst is to come” as commercial mortgage defaults will rise in the two or three years after the current economic slowdown ends, the chief investment officer at U.S. insurer and financial services provider Metlife Inc said on Wednesday, according to Bloomberg.
“The worst is to come,” CIO Steven Kandarian said in an interview with Bloomberg Television in New York. “typically there’s a lag between when the economy softens and when defaults actually occur.”
Kandarian said his company’s delinquencies will be small.
“Like all firms that hold these kind of mortgages, we’ll have some issues,” he said.
Metlife – which also runs a retail bank – underwrote its loans “very carefully” to minimize the risk of losing principal and expects to fund more mortgages as competitors bow out of the market, he told Bloomberg.