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May 11, 2009

MBA quarterly survey: Credit crunch, economic concerns drive slower commercial and multifamily lendingMortgagePress.comMBA, commercial loans, Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations Commercial and multifamily mortgage loan originations remained low in the third quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Third quarter originations were fifty-three percent lower than during the same period last year. The year-over-year decrease was seen across all property types and most investor groups. "Uncertainty stemming from the credit crunch, and now the deteriorating economy, has led to a continued pull-back among both lenders and borrowers," said Jamie Woodwell, MBA's vice president of commercial real estate Research. "The need among most investor groups to conserve capital, and the uncertainty of how the slowing economy will affect property fundamentals, is fueling a prolonged pause in all aspects of commercial real estate activity." Decreases in total commercial/multifamily mortgage originations continued to be led by a drop in commercial mortgage-backed security (CMBS) conduit loans and loans for commercial bank portfolios. These numbers show the impact of the recent credit crunch and other market disruptions. Third quarter 2008 53 percent lower than Q3 2007 The decrease in commercial/multifamily lending activity during the third quarter was driven by decreases in originations for all property types. When compared to the third quarter of 2007, the overall 53 percent decrease included an 87 percent decrease in loans for hotel properties, a 61 percent decrease in loans for office properties, a 59 percent decrease in loans for health care properties, a 39 percent decrease in loans for industrial properties, a 30 percent decrease in multifamily property loans, and a 30 decrease in retail property loans. Among investor types, conduits for CMBS saw a significant decrease of 93 percent compared to last year's third quarter. There was also a 71 percent decrease in loans for commercial bank portfolios, and a 27 percent decrease in loans for life insurance companies. The dollar volume of loans for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac) saw an increase of 15 percent. Third quarter 2008 11 percent lower than Q2 2008 Third quarter 2008 mortgage originations were 11 percent lower than originations in the second quarter of 2008. Among investor types, loans for commercial bank portfolios saw a decrease in loan volume of 55 percent compared to the second quarter of 2008, loans for conduits for CMBS saw an increase in loan volume of 67 percent compared to the second quarter of 2008, life insurance companies increased by 27 percent during the same time span, and GSEs volume increased 12 percent from the second quarter 2008 to third quarter 2008. On a quarter-over-quarter basis, the size of the decline in loans for commercial banks overwhelmed increases among other investor groups. Compared to the second quarter of 2008, third quarter originations for hotel properties saw a 71 percent decrease. There was a 42 percent decrease for health care properties, a 28 percent decrease for office properties, a 22 percent increase for industrial properties, a 9 percent increase for retail properties, and a 9 percent increase for multifamily properties. To view the report, click here.
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