Commercial Mortgage Delinquencies Vary by Investor: MBA


Delinquency rates were mixed in the second quarter for commercial and multifamily mortgage investor groups, according to a new report issued by the Mortgage Bankers Association (MBA) Thursday.

The delinquency rate for loans held in commercial mortgage-backed securities (CMBS) is the highest it’s been since MBA began tracking the sector in 1997. Delinquency rates for other groups, on the other hand, remain below levels seen in the early 1990s, some by large margins.

According to MBA’s study, between the first quarter and second quarter 2010, the 30-plus day delinquency rate on loans held in CMBS rose 1.39 percentage points to 8.22 percent.

Delinquencies for the GSEs edged up also. MBA reported that the 60-plus day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01 percentage points to 0.80 percent. The 60-plus day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.03 percentage points to 0.28 percent.

Insurers and private lenders, though, saw better performance from their commercial mortgages. MBA’s analysis showed that the 60-plus day delinquency rate on loans held in life insurance company portfolios decreased 0.02 percentage points to 0.29 percent. The 90-plus day delinquency rate on loans held by FDIC-insured banks and thrifts remained unchanged at 4.26 percent.

“Different investor groups lend in different ways and on different types of properties,” said Jamie Woodwell, MBA’s VP of commercial real estate research. “Those differences are becoming more evident as the economy continues to struggle to work its way out of the recession.”

Woodwell went on to explain, “Life insurance companies, Fannie Mae, and Freddie Mac continue to see relatively low delinquency rates on their commercial and multifamily mortgages, the delinquency rate on banks’ commercial and multifamily mortgages appears to have reached a plateau, and the delinquency rate for loans in CMBS continued to climb during the period.”

According to Woodwell, performance across all investor groups will continue to depend on economic growth and its ability to generate demand for commercial real estate space.

MBA’s analysis looks at commercial and multifamily delinquency rates for five of the largest investor groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae, and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

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