MBA: Commercial Delinquency Levels Vary By Investor Groups

Posted by Orb Staff on September 02, 2010 No Comments
Categories : Commercial Mortgage

Delinquency rates for commercial/multifamily mortgage investor groups in the second quarter were mixed, 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 1990's – some by large margins – the MBA says.

Between the first and second quarters of the year, the 30+ day delinquency rate on loans held in CMBS rose 1.39 percentage points to 8.22%. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.02 percentage points to 0.29%.

The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae and Freddie Mac rose 0.01 percentage points to 0.80% and 0.03 percentage points to 0.28%, respectively.

The 90+ day delinquency rate on loans held by Federal Deposit Insurance Corp.-insured banks and thrifts remained unchanged, at 4.26%.

Jamie Woodwell, the MBA's vice president of commercial real estate research, says the differences between investor groups' lending practices and property focuses are becoming more evident.

‘Life insurance companies, Fannie Mae and Freddie Mac continue to see relatively low delinquency rates on their commercial and multifamily mortgages, the delinquency rate on banks' commercial and multifamily mortgages appears to have reached a plateau and the delinquency rate for loans in CMBS continued to climb during the period,’ Woodwell says. ‘Performance across all investor groups will continue to depend on economic growth and its ability to generate demand for commercial real estate space.’

The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80% of commercial/multifamily mortgage debt outstanding.

The analysis incorporates the same 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.

A copy of the report is available here.

SOURCE: Mortgage Bankers Association

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