MBA: 4Q Commercial/Multifamily Delinquencies Remain Low
The Mortgage Bankers Association reported delinquency rates for commercial and multifamily mortgage loans remained low in the fourth quarter, despite an uptick in commercial mortgage-backed securities delinquencies.
The quarterly MBA Commercial/Multifamily Delinquency Report said based on the unpaid principal balance of loans, delinquency rates for each group at the end of the fourth quarter were as follows:
–Banks and thrifts (90 or more days delinquent or in non-accrual): 0.59 percent, a decrease of 0.03 percentage points from a year ago.
–Life company portfolios (60 or more days delinquent): 0.04 percent, a decrease of 0.04 percentage points from a year ago.
–Fannie Mae (60 or more days delinquent): 0.05 percent, a decrease of 0.02 percentage points from a year ago.
–Freddie Mac (60 or more days delinquent): 0.03 percent, an increase of 0.02 percentage points from a year ago.
–CMBS (30 or more days delinquent or in REO): 4.53 percent, an increase of 0.30 percentage points from a year ago.
“For most investor groups, commercial and multifamily mortgage delinquencies are at or near their all-time lows,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. “Only loans in commercial mortgage-backed securities continue to show elevated levels of delinquencies and loans in foreclosure, as the market continues to work through the large volume of mortgages made during the 2005-2007 time period.”
The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities, life insurance companies, Fannie Mae, and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.
The analysis incorporates the measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.
Construction and development loans are not included in the numbers presented here, but are 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 Federal Deposit Insurance Corp. delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties.
Differences between the delinquencies measures are detailed in Appendix A. The full report can be accessed at https://www.mba.org/Documents/Research/4Q16CMFDelinquency.pdf.
