WASHINGTON - Second-quarter commercial mortgage-backed security servicing volumes rose at a slower rate than in the same period last year, according to the Mortgage Bankers Association's quarterly survey.

The portfolios of the 10 largest commercial mortgage bond servicers grew 4%, to $7.6 billion, compared with a 5% rise a year earlier, the trade group said.

In the first half the 10 servicers' added portfolio volume fell more than 40% from a year earlier, to $14.8 billion. At the end of June these companies serviced $207.4 billion of loans.

Higher interest rates have precluded commercial property owners from refinancing their mortgages, which has lead to a slowdown in originations and securitizations, the MBA said.

This year's issuance of commercial-mortgage-backeds is now expected to be between $55 billion and $60 billion, down from earlier estimates of more than $60 billion.

Last year the industry issued $67.3 billion. In 1998, the industry's peak, it issued $78 billion.

In the 12-month period that ended June 30, the volume of commercial mortgages being subserviced grew more than 46%, to $13.6 billion, the MBA said.

Gail Davis, senior staff vice president at the MBA, said the jump in subservicing volume "may indicate continued consolidation of servicing over the year."

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