1Q Commercial, Multifamily Mortgage Delinquencies At Record Lows
Commercial and multifamily mortgage delinquenciesfell to near-record lows in the first quarter, the Mortgage Bankers Association reported this morning.
The MBA 1st Quarter Commercial/Multifamily Delinquency Report said based on unpaid principal balance of loans, delinquency rates for each group were as follows on March 31:
–Banks and thrifts (90 or more days delinquent or in non-accrual): 0.48 percent, unchanged from the fourth quarter;
–Life company portfolios (60 or more days delinquent): 0.04 percent, down 0.01 percentage points from the fourth quarter;
–Fannie Mae (60 or more days delinquent): 0.07 percent, up 0.01 percentage points from the fourth quarter;
–Freddie Mac (60 or more days delinquent): 0.03 percent, up 0.02 percentage points from the fourth quarter; and
–CMBS (30 or more days delinquent or in REO): 2.61 percent, down 0.16 percentage points from the fourth quarter.
“Steady U.S. economic growth continues to support the financing and values of commercial and multifamily properties,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. “Commercial and multifamily mortgage delinquencies remain at or near record lows for most capital sources, and it’s hard to imagine loans performing better than they currently do.”
Woodwell said he sees little reason to expect a marked deterioration of near-term performance given the current environment.
The MBA quarterly 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 the commercial/multifamily mortgage debt outstanding.
The MBA 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 generally not included in the numbers presented in MBA’s report, 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 FDIC 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 of the report. Click here to view the report.
