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
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
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