Q3 Delinquency Rates Low for Commercial and Multifamily Mortgages

Q3 Delinquency Rates Low for Commercial and Multifamily Mortgages

December 4, 2018
Builder confidence in the multifamily remained solid as inventory grew slightly in the first quarter, according to a pair of data reports
Commercial and multifamily mortgage loans recorded low delinquency rates during the third quarter, according to new data from the Mortgage Bankers Association (MBA).
On a quarter-over-quarter measurement based on the unpaid principal balance of loans, the MBA determined the third quarter delinquency rate for banks and thrifts was 0.48 percent, a 0.02 percent decline. The rate for life company portfolios was 0.04 percent, down 0.01 percent, and the rate for commercial mortgage-backed securities was 3.05 percent, down 0.47 percent. The third quarter rate for Freddie Mac was 0.01 percent, unchanged from the second quarter, while Fannie Mae’s 0.07 percent rate represented a 0.03 percent drop.
“Commercial and multifamily mortgage delinquency rates are extremely low right now,” said said Jamie Woodwell, MBA’s Vice President for Commercial Real Estate Research. “The delinquency rate for loans held on bank balance sheets set a new series low, and delinquency rates for loans held by life companies or guaranteed by Fannie Mae and Freddie Mac are all below 10 basis points. Loans held in CMBS have a higher ‘headline’ delinquency rate because of the way the industry reports on those loans. However, when excluding loans in foreclosure or real estate owned (REO)—which are generally omitted from the calculations for the other groups—the CMBS delinquency rate is just 45 basis points, the same level as December 2005.”
Commercial, Compliance