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Questions to consider when contemplating a branch partnership

National Mortgage Professional
May 26, 2008

Volume of maturing commercial/multi-family loans to be low in coming yearsMortgagePress.comMortgage Bankers Association, commercial and multi-family mortgage market The Mortgage Bankers Association has reported that the commercial and multi-family mortgage market faces limited exposure to refinance risks stemming from the current credit crunch through the release of its Research DataNote. The report notes that relatively few commercial/multi-family mortgages will mature in the next two years. "There's been a general impression that a large volume of commercial/multi-family mortgages are coming due this year and next," said Jamie Woodwell, senior director of commercial/multi-family research at MBA. "The reality is that 2008 and 2009 will see a relatively small volume of maturing mortgages, with the majority of commercial mortgage-backed securities (CMBS) loans not maturing until 2015 or later." Capturing data from JPMorgan and Wachovia Capital Markets, the DataNote reports that there is more than $600 billion of outstanding loans in CMBS fixed-rate deals. Of this, only $16 billion is scheduled to mature in 2008 and another $19 billion in 2009. The surge in sales and financing volume during 2005, 2006 and 2007, coupled with the fact that CMBS loans tend to have a 10-year term, means that the majority of CMBS loans will not mature until 2015 or later. Ninety-eight billion dollars of loans are scheduled to mature in 2015, $128 billion in 2016 and $127 billion in 2017. The majority of the loans due in the coming years is well-seasoned and has been amortizing. JPMorgan reports that $14 billion of the $16 billion maturing in 2008 are fully amortizing, as are $14 billion of the $19 billion coming due in 2009. According to Wachovia Capital Markets, more than two-thirds of the volume of loans coming due prior to May 2009 was originated prior to 2000. In addition to the fixed-rate conduit deals described above, the DataNote reports that Wachovia Capital Markets has identified $30 billion of large-loan floating rate deals that will be coming due prior to May 2009. The maturity dates of these loans are spread throughout the period, with relatively larger volumes—3.5 and $3.3 billion, respectively—coming due in the August and October 2008. The DataNote focuses on maturing mortgages in the CMBS market. Banks and thrifts will be more likely to have shorter-term and adjustable-rate loans, while life companies will tend to have longer-term fixed-rate loans. Each group's maturity patterns will also be affected by the ups-and-downs of its originations experience. For more information, visit www.mortgagebankers.org.
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