Commercial, multifamily delinquencies still low in second quarter

by Steve Randall24 Sep 2019

A combination of positive factors is supporting commercial and multifamily lending with delinquencies remaining low.

The Mortgage Bankers Association reports that delinquencies in the second quarter of 2019 decreased or were unchanged across all five main group – banks & thrifts, life company portfolios, Fannie Mae, Freddie Mac, and CMBS – which together hold more than 80% of commercial/multifamily mortgage debt outstanding.

"The strong economy, low interest rates, and liquid finance markets are all contributing to delinquency rates that are at or near record lows for commercial and multifamily mortgage loans," said Jamie Woodwell, MBA's Vice President of Commercial Research & Economics. "Despite uncertainty on many economic fronts, it is hard to identify factors that would dramatically change the delinquency rate picture in the near term."

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

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.46%, a decrease of 0.02 percentage points from the first quarter;
  • Life company portfolios (60 or more days delinquent): 0.04%, unchanged from the first quarter;
  • Fannie Mae (60 or more days delinquent): 0.05%, a decrease of 0.02 percentage points from the first quarter;
  • Freddie Mac (60 or more days delinquent): 0.03%, unchanged from the first quarter; and
  • CMBS (30 or more days delinquent or in REO): 2.46%, a decrease of 0.15 percentage points from the first quarter.