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Commercial And Multifamily Delinquency Rates Fall

Katie Jensen
Dec 08, 2021

Based on unpaid principal balance, delinquency rates fell for a number of groups throughout the third quarter of 2021.

KEY TAKEAWAYS
  • Banks and thrifts (90 or more days delinquent or in non-accrual) decreased by 0.06 percentage points from the second quarter of 2021.
  • Life company portfolios (60 or more days delinquent) decreased by 0.01 percentage points from the second quarter. 
  • Fannie Mae (60 or more days delinquent) fell 0.11 percentage points from the second quarter.
  • Freddie Mac (60 or more days delinquent) fell 0.03 percentage points from the second quarter.

Commercial and multifamily mortgage delinquencies decreased in the third quarter of 2021, according to the latest Mortgage Bankers Association (MBA) Commercial/Multifamily Delinquency report. 

Based on unpaid principal balance, delinquency rates fell for a number of groups throughout the third quarter. These groups include Banks and thrifts (90 or more days delinquent or in non-accrual) at 0.69% by the third quarter, representing a decrease of 0.06 percentage points from the second quarter of 2021. Life company portfolios (60 or more days delinquent) were at 0.04% by the third quarter, representing a decrease of 0.01 from the second quarter. 

Fannie Mae (60 or more days delinquent) was at 0.42% by the third quarter, representing a decrease of 0.11 percentage points from the second quarter. Freddie Mac (60 or more days delinquent) was at 0.12% by the third quarter, representing a decrease of 0.03 from the second quarter. Also, CMBS (30 or more days delinquent or in REO) was at 4.86%, representing a decrease of 0.82 percentage points from the second quarter.

"Commercial mortgage delinquency rates for every major capital source have come down since the early months of the pandemic," said Jamie Woodwell, MBA's vice president of commercial real estate research. "With low numbers of loans becoming newly delinquent, much of the declines are coming from the resolution of loans with later-stage delinquency statuses. Despite successive waves of COVID-19, the economy has shown solid growth, and it is hard to imagine a return to the extraordinary shutdowns in early 2020 that negatively impacted some sectors of commercial real estate."

Construction and development loans are not included in the report, but are generally included in many regulatory definitions of 'commercial real estate,' despite the fact they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers, or other income-producing properties. 

The FDIC delinquency rates for bank and thrift held mortgages reported here also include loans backed by owner-occupied commercial properties.

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