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Mortgage Debt Plummets $5 Billion in First Quarter

Robert Ottone
Jul 01, 2013

The first quarter of 2013 saw a rise in the U.S. economy, with an annual rate approaching nearly two percent. Last year’s fourth quarter saw merely a 0.4 percent increase. These numbers come courtesy of the Mortgage Bankers Association’s First Quarter Databook for 2013. The study also highlights growth in employment, numbering nearly 150,000 jobs added during January alone. This would be followed by 32,000 jobs in February, 142,000 jobs in March, 149,000 jobs in April and 175,000 jobs in May. According to the MBA's First Quarter Databook for 2013, mortgage debt, though there was an increase in originations, fell nearly $5 billion or 0.2 percent during the first quarter. The FHA, Fannie Mae and Freddie Mac increased the amount of mortgage debt they guaranteed by nearly $4 billion, while banks and thrifts increased their holdings by around $3 billion. Commercial and multifamily mortgage originations for the first quarter of 2013 stood at nine percentage points higher than in 2012. Delinquency rates improved for both commercial and multifamily mortgage loans for the first quarter of 2013. “First quarter commercial and multifamily mortgage origination volumes were nine percent higher than last year’s first quarter level,” said Jamie Woodwell, vice president of commercial real estate research for the MBA. “The overall number masks larger increases in the dollar volume of loans originated for commercial mortgage-backed securities (CMBS) and Fannie Mae and Freddie Mac and a decline in the amount originated for life insurance company portfolios.” Commercial banks continue to hold the majority of shares for multifamily and commercial mortgages. Roughly $840 million or 35 percent of mortgages for commercial/multifamily use are owned by commercial banks. There was also a 0.5 percent increase in outstanding multifamily mortgage debt, while banks and thrifts comprised approximately 35 percent of the mortgage debt outstanding in terms of business sector. Outstanding multifamily mortgage debt has been on a steady increase since 2007.
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