During the third quarter of 2011, delinquency rates declined for commercial and multifamily mortgages held by banks and in commercial mortgage-backed securities (CMBS). Delinquency rates increased for loans held by life insurance companies and held or insured by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, but are still at low levels, according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report.
"There were modest changes in commercial/multifamily delinquency rates during the third quarter," said Jamie Woodwell, MBA's VP of commercial real estate research. "The delinquency rates for loans held by life insurance companies, Fannie Mae and Freddie Mac each ticked up slightly in the quarter, but remained at relatively low overall levels; delinquency rates for bank-held loans continued to decline from their cycle highs; and delinquency rates for loans held in CMBS fell slightly as loans made during the first half of the year were added to the base."
Between the second and third quarters of 2011, the 90-plus day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.19 percent to 3.75 percent. The 60-plus day delinquency rate for loans held in life company portfolios increased 0.07 percentage points to 0.19 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Fannie Mae increased 0.11 percentage points to 0.57 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Freddie Mac increased 0.02 percentage points to 0.33 percent. The 30-plus day delinquency rate for loans held in CMBS decreased 0.10 percentage points to 8.92 percent.
The third quarter 2011 delinquency rate for commercial and multifamily mortgages held by banks and thrifts was 2.83 percentage points lower than the series high (6.58 percent, reached in the second quarter of 1991). The delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios was 7.34 percentage points lower than the series high (7.53 percent, reached during the second quarter of 1992); the rate for multifamily loans held by Fannie Mae was 3.05 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991); and the rate for multifamily loans held by Freddie Mac was 6.48 percentage points lower than the series high (6.81 percent, reached in the fourth quarter of 1992). The rate for loans held in CMBS was 0.10 percentage points below the series high (9.02 percent, reached in the second quarter of 2011).
Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the third quarter were as follows:
►CMBS: 8.92 percent/30-plus days delinquent or in real estate-owned (REO);
►Life company portfolios: 0.19 percent (60+days delinquent);
►Fannie Mae: 0.57 percent (60 or more days delinquent);
►Freddie Mac: 0.33 percent (60 or more days delinquent);
►Banks and thrifts: 3.75 percent (90 or more days delinquent or in non-accrual).
