OREANDA-NEWS. Loan changes in U.S. CMBS deals are not only taking place after a deal closes, but before it securitizes as well, according to Fitch Ratings in its latest weekly U.S. CMBS newsletter.

While it is not unusual for a pool to change from initial proposal to final pool cut, Fitch notes that the number of iterations have increased materially over the past 12 months. In a sample of 28 Fitch rated deals for the 12-month period ending June 30, 2015, Fitch observed approximately 1,000 loans that were dropped, representing approximately 30% of the final transaction amount. The majority of these 'dropped loans' were under $20 million. Larger loans that drop from pools will have a more significant impact on the overall deal metrics, including credit enhancement.

Fitch is concerned that the numerous loan drops could indicate a lack of lender due diligence prior to sending the initial loan information to rating agencies and/or B-piece buyers. This comes on the heels of the trend of loans changing in new CMBS deals post-closing, which Fitch discussed in its Nov. 23 weekly U.S. CMBS newsletter ('Fitch Seeing Loan Profiles Change Soon after Securitization').