Commercial / Multifamily Mortgage Balances Up $8.1B in First Quarter

by 13 Jun 2012

(MBA) -- Washington, DC (June 12, 2012)
– The level of commercial/multifamily mortgage debt outstanding increased by $8.1 billion, or 0.3 percent, in the first quarter of 2012, as three of the four major investor groups increased their holdings, according to the Mortgage Bankers Association (MBA).

The $2.37 trillion in outstanding commercial/multifamily mortgage debt was $8.1 billion higher than the fourth quarter 2011 figure. Multifamily mortgage debt outstanding rose to $818 billion, an increase of $6.9 billion or 0.8 percent from the fourth quarter of 2011.

“The amount of commercial and multifamily mortgage debt outstanding increased during the first quarter, as lenders put out more in new loans than paid-off or paid down,” said Jamie Woodwell, Vice President of Commercial Real Estate Research at the Mortgage Bankers Association.  “Banks; Fannie Mae, Freddie Mac and FHA; and life insurance companies all increased their holdings of commercial and multifamily mortgages, more than offsetting declines among CMBS and other investor groups.”

The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).

MBA recently improved its reporting of commercial and multifamily mortgage debt outstanding.  The new reporting excludes two categories of loans that had formerly been included – loans for acquisition, development and construction and loans collateralized by owner-occupied commercial properties.  By excluding these loan types, the analysis here more accurately reflects the balance of loans supported by office buildings, retail centers, apartment buildings and other income-producing properties that rely on rents and leases to make their payments.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $808 billion, or 34 percent of the total.

CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $575 billion, or 24 percent of the total. Agency/GSE portfolios and MBS hold $352 billion, or 15 percent of the total, and life insurance companies hold $317 billion, or 13 percent of the total. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues.  These loans appear in the “CMBS, CDO and other ABS” category.



Is TILA-RESPA a good or bad thing long term?