Commercial and multifamily loans were resilient in Q1 says MBA

by Steve Randall11 Jun 2019

An analysis of commercial/multifamily delinquencies among the five largest investor groups shows continued strength.

"Steady U.S. economic growth continues to support the financing and values of commercial and multifamily properties," said Jamie Woodwell, MBA's Vice President of Commercial Research & Economics. "Commercial/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. Given the environment, there's little reason to expect a marked deterioration of near-term performance."

Commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac, collectively hold more than 80% of the commercial/multifamily mortgage debt outstanding.

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the first quarter were as follows:

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.48%, unchanged from the fourth quarter of 2018;
  • Life company portfolios (60 or more days delinquent): 0.04%, a decrease of 0.01 percentage points from the fourth quarter of 2018;
  • Fannie Mae (60 or more days delinquent): 0.07%, an increase of 0.01 percentage points from the fourth quarter of 2018;
  • Freddie Mac (60 or more days delinquent): 0.03%, an increase of 0.02 percentage points from the fourth quarter of 2018; and
  • CMBS (30 or more days delinquent or in REO): 2.61%, a decrease of 0.16 percentage points from the fourth quarter of 2018.

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