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HUD approves $731 million in Neighborhood Stabilization funding for 48 states and local communities

National Mortgage Professional
Mar 20, 2009

Commercial/multifamily mortgage debt outstanding increases during fourth quarterMortgagePress.comMBA, statistics, commercial/multifamily mortgage debt, Federal Reserve Board Flow of Funds, GSEs The level of commercial/multifamily mortgage debt outstanding grew by 0.7 percent in the fourth quarter of 2008, to $3.5 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. The total was an increase of $166 billion, or 5 percent from the end of 2007. The $3.5 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was an increase of $23 billion from the third quarter of 2008. Multifamily mortgage debt outstanding grew to $900 billion, an increase of $5.4 billion or 0.6 percent from the third quarter. "Counter to what many expected, investors increased their holdings of commercial and multifamily mortgages during the fourth quarter," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Banks, thrifts, Fannie Mae, Freddie Mac, life insurance companies and other lenders extended additional credit to the market during the fourth quarter, lending more in new commercial and multifamily mortgages than they saw paid off or paid down on existing loans." Commercial banks continue to hold the largest share of commercial/multifamily mortgages at $1.55 trillion, or 44 percent of the total. Many of the commercial mortgage loans reported by commercial banks however, are actually "commercial and industrial" loans to which a piece of commercial property has been pledged as collateral. It is the borrower's business income and not the income derived from the property's rents and leases that drive the underwriting, pricing and performance of these loans. A MBA Research PolicyNote found that among the top 10 commercial real estate bank lenders, 48 percent of their aggregate balance of commercial (non-multifamily) real estate loans were related to owner-occupied properties, with only 52 percent being income property loans. CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $746 billion, or 21 percent of the total. Life insurance companies hold $316 billion, or 9 percent of the total, and savings institutions hold $193 billion, or 5.5 percent of the total. Government sponsored enterprises (GSEs) and Agency- and GSE- backed mortgage pools, including Fannie Mae, Freddie Mac and Ginnie Mae, hold $189 billion in "whole" loans in their own portfolios and an additional $149 billion in multifamily loans that support the mortgage-backed securities they issue. This represents 10 percent of the total outstanding commercial/multifamily mortgages. Multifamily mortgage debt outstanding For multifamily mortgages, the GSEs and Ginnie Mae hold the largest share, with $189 billion in their own portfolios and $149 billion in federally related mortgage pools - 38 percent of the total multifamily debt outstanding. They are followed by commercial banks with $214 billion, or 24 percent of the total; CMBS, CDO and other ABS issuers with $115 billion, or 13 percent of the total; state and local governments with $69 billion, or 8 percent of the total; savings institutions with $65 billion, or seven percent of the total; and life insurance companies with $50 billion, or 6 percent of the total. Changes in commercial/multifamily mortgage debt outstanding In the fourth quarter of 2008, commercial banks saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt--an increase of $23 billion, or 1.5 percent. GSEs increased their holdings of commercial/multifamily mortgages by $10 billion, or six percent. In percentage terms, GSEs saw the biggest increase in their holdings of commercial/multifamily mortgages, a jump of 6 percent, while other insurance companies saw their holdings decrease by nine percent. Changes in multifamily mortgage debt outstanding The $5 billion increase in multifamily mortgage debt outstanding between the third quarter 2008 and fourth quarter 2008 represents a 0.6 percent increase. In dollar terms, GSEs saw the largest increase in their holdings of multifamily mortgage debt--an increase of $10 billion, or six percent. Agency- and GSE-backed mortgage pools increased their holdings of multifamily mortgage debt by $720 million, or 0.5 percent. Private pension funds increased by $222 million, or eight percent. In percentage terms, private pension funds recorded the biggest increase in their holdings of multifamily mortgages at 8 percent, while finance companies saw the biggest drop at -12 percent. Changes in commercial/multifamily mortgage debt outstanding during 2008 Between December 2007 and December 2008, commercial banking saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt--an increase of $152 billion, or 11 percent. GSEs increased their holdings of commercial/multifamily mortgages by $42 billion or 28 percent. Finance companies experienced a net increase of $13 billion or 23 percent. In percentage terms, GSEs saw the biggest increase in their holdings of commercial/multifamily mortgages by 28 percent, and other insurance companies saw the biggest decline at -11 percent. The $57 billion increase in multifamily mortgage debt outstanding during 2008 represents a seven percent increase. In dollar terms, commercial banking, driven by the acquisition of Washington Mutual by J.P. Morgan, increased their holdings of multifamily mortgage debt by $46 billion or 27 percent. In percentage terms, private pension funds recorded the biggest increase in their holdings of multifamily mortgages, 38 percent, while savings institutions saw the biggest drop, -30 percent. To view the full report, click here. For more information, visit www.mortgagebankers.org.
Published
Mar 20, 2009
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