MBA: Credit markets and economy add pressure to commercial mortgage performance MortgagePress.comMBA, commercial mortgage market, Commercial/Multifamily Delinquency Report
Delinquency rates continued to tick up in the third quarter for
most commercial/multifamily mortgage investor groups, but remained
at the lower end of their historical ranges, according the third
quarter Commercial/Multifamily Delinquency Report from the Mortgage
Bankers Association (MBA).
"The frozen credit markets and deteriorating economic conditions
are placing increased pressure on the performance of commercial and
multifamily mortgages," said Jamie Woodwell, MBA's Vice President
of Commercial Real Estate Research. "Commercial/multifamily
mortgages have not seen the same kind of deterioration in
performance witnessed among other real estate loans, and at the end
of the third quarter, delinquency rates for every investor group
remained at the lower end of their historical ranges. That being
said, delinquency rates for nearly every investor group did see
increases during the third quarter, and economic and credit market
stress is likely to continue that trend."
Between the second and third quarters, the 30+ day delinquency
rate on loans held in commercial mortgage-backed securities (CMBS)
rose 0.10 percentage points to 0.63 percent (Corrected). The 60+
day delinquency rate on loans held in life company portfolios rose
0.03 percentage points to 0.06 percent. The 60+ day delinquency
rate on multifamily loans held or insured by Fannie Mae rose 0.05
percentage points to 0.16 percent. The 60+ day delinquency rate on
multifamily loans held or insured by Freddie Mac fell 0.02
percentage points to 0.01 percent. The 90+day delinquency rate on
loans held by FDIC-insured banks and thrifts rose 0.20 percentage
points to 1.38 percent.
The MBA analysis looks at commercial/multifamily delinquency
rates for five of the largest investor-groups: commercial banks and
thrifts, commercial mortgage-backed securities (CMBS), life
insurance companies, Fannie Mae and Freddie Mac. Together these
groups hold more than 80 percent of commercial/multifamily mortgage
debt outstanding.
The analysis incorporates the same measures used by each
individual investor group to track the performance of their loans.
Because each investor group tracks delinquencies in its own way,
delinquency rates are not comparable from one group to another.
Based on the unpaid principal balance of loans (UPB),
delinquency rates for each group at the end of the second quarter
were as follows:
• CMBS: 0.63 percent (30+ days delinquent or in
REO);
• Life company portfolios: 0.06 percent (60+days
delinquent);
• Fannie Mae: 0.16 percent (60 or more days
delinquent);
• Freddie Mac: 0.01 percent (60 or more days
delinquent);
• Banks and thrifts: 1.38 percent (90 or more days
delinquent or in non-accrual)
To put these numbers in context, of 35,135
commercial/multifamily loans in life company portfolios, with a
total unpaid principal balance of $253 billion, only 36 loans with
an aggregate UPB of less than $144 million were 60+ days delinquent
at the end of the quarter. Of $1.2 trillion of
commercial/multifamily mortgages at FDIC-insured banks and thrifts,
only $18 billion was 90-plus days delinquent.
To view the report, click
here.
For more information, visit www.mortgagebankers.org.
