Are the darkest days over for the commercial mortgage-backed securities (CMBS) market? Although the delinquency rate on loans in CMBS rose to an all-time high of 8.71%, the rate of increase is showing signs of moderating, according to New York-based Trepp LLC.

Specifically, the delinquency rate on loans 30 days or more past due, in foreclosure or real estate owned (REO) rose 12 basis points in July following an increase of 17 basis points in June. For the last 10 months prior to July, the rate of increase in delinquencies had averaged 37 basis points per month.

Trepp, an independent provider of CMBS market information, says the number of loan modifications has accelerated dramatically throughout the course of this year. Loan modifications have already surpassed the total number of modifications completed in 2008 and 2009 combined. The rate of modifications in 2010 is set to triple from 2009 levels.

That’s significant because as troubled loans get resolved, the loans are removed from the delinquency category. REO loans that are liquidated also put downward pressure on delinquencies. REO properties refer to real estate owned by a lender, usually a bank, after an unsuccessful sale at a foreclosure auction.

Here are some of the highlights contained in Trepp’s delinquency report for July:

* The hotel delinquency rate fell 60 basis points from June, but at 18.41% the delinquency rate is still the highest among the major property types;

* The multifamily delinquency rate dropped 9 basis points, but at 14% it remains the second highest delinquency rate among major property types;

* The retail delinquency rate jumped 22 basis points in July and now stands at 6.90%

* The office delinquency rate rose 31 basis points to 6.35%.

* The industrial sector is still the best performing sector among the major property types, but the delinquency rate rose 56 basis points in July and now stands at 6.04%.