Hotel and retail mortgages dragging down recovery

Mortgages backed by hotels and retail properties are struggling — and attracting yield-hungry investors willing to tolerate the risk, the Wall Street Journal reported. As the risk that the loans will fail increases, so does the yield of the securities into which they are bundled. One way to measure that risk is to compare that yield to what super-safe 10-year Treasury notes pay. At the moment, the difference between those two numbers, called the spread, is high. Consider lower-rated commercial mortgage-backed securities — those rated BBB, or one level above what’s commonly called junk status. Read more at The Real Deal.