Economic Weakness Battering Commercial Mortgage Performance

Posted by Orb Staff on June 16, 2010 No Comments
Categories : Commercial Mortgage

uency rates continued to increase in the first quarter for all commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report. The delinquency rate for loans held in commercial mortgage-backed securities (CMBS) is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990s – some by large margins. Based on the unpaid principal balance of loans, delinquency rates for each group at the end of the first quarter were as follows: [list]CMBS: 7.24% (30+ days delinquent or in REO, a 1.54 percentage-point increase from the fourth quarter of 2009);*Banks and thrifts: 4.24% (90+ days delinquent or in non-accrual, a 0.32 percentage-point increase);*life company portfolios: 0.31% (60+ days delinquent, a 0.12 percentage-point increase);*Fannie Mae: 0.79% (60+ days delinquent, a 0.16 percentage-point increase);*Freddie Mac: 0.24% (60+ days delinquent, a 0.05 percentage-point increase).[/list] ‘Weakness in the economy has continued to weigh on commercial properties, which, in turn, weighs on the mortgages they back,’ says Jamie Woodwell, MBA's vice president of commercial real estate research. ‘Economic growth, specifically in areas of jobs and consumer spending, will be key to stabilizing the commercial property and mortgage markets going forward.’ To view the entire report, click [link=http://www.mortgagebankers.org/files/Research/CommercialNDR/1Q10CommercialNDR.pdf]Mortgage Bankers Association]here[/link]. SOURCE: [link=http://www.mortgagebankers.org/files/Research/CommercialNDR/1Q10CommercialNDR.pdf]Mortgage Bankers Association

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