MBA Tracks Commercial/Multifamily Delinquency Rates

Posted by Orb Staff on September 10, 2009 No Comments
Categories : Commercial Mortgage

Delinquency rates continued to increase in the second quarter for all commercial/multifamily mortgage investor groups, according to the Commercial/Multifamily Delinquency Report from the Mortgage Bankers Association (MBA).

‘The economic fallout of the recession continued to push commercial and multifamily delinquency rates higher during the second quarter,’ says Jamie Woodwell, MBA's vice president of commercial real estate research. "Lower levels of employment, the pullback by consumers and other aspects of the slowdown translated into a difficult operating environment for many income-producing properties. That, in turn, has led to increased stress on the loans those properties support."

Between the first and second quarters, the 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 2.04 percentage points to 3.89%. The 60+ day delinquency rate on loans held in life company portfolios rose 0.03 percentage points to 0.15%.

The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.17 percentage points to 0.51%. The 90+ day delinquency rate on multifamily loans held or insured by Freddie Mac rose 0.02 percentage points to 0.11%. The 90+day delinquency rate on loans held by Federal Deposit Insurance Corp.-insured banks and thrifts rose 0.64 percentage points to 2.92%.

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 its loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.

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

  • CMBS – 3.89% (30+ days delinquent or in REO);
  • Life company portfolios – 0.15% (60+days delinquent);
  • Fannie Mae – 0.51% (60+ days delinquent)
  • Freddie Mac – 0.11% (90+ days delinquent); and
  • Banks and thrifts -Â 2.92% (90+ days delinquent or in non-accrual).

SOURCE: Mortgage Bankers Association

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