Commercial, Multifamily Mortgage Performance Falls in Third Quarter 2009
Delinquencies on commercial mortgage-backed securities rose to a record in the third quarter 2009 as unemployment rose and landlords struggled to retain tenants.
The percentage of commercial mortgage-backed securities (CMBS) loans at least 30 days past due rose to 4.06 percent from 1.17 percent a year earlier, the Mortgage Bankers Association said.
“Commercial and multifamily mortgages continued to feel stress in the face of the weakened economy,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.
“The deterioration in commercial and multifamily loan performance is generally in line with what is being seen in other parts of the economy, with loans backed by commercial properties continuing to perform far better than construction and development loans.”
Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other income-producing properties.
The MBA delinquency report analyzed commercial and multifamily delinquency rates for five of the largest investor groups. The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac - these groups hold more than 80% of commercial/multifamily mortgage debt outstanding.
• CMBS: 4.06 percent (30+ days delinquent or in REO);
• Life company portfolios: 0.23 percent (60+days delinquent);
• Fannie Mae: 0.62 percent (60 or more days delinquent)
• Freddie Mac: 0.11 percent (90 or more days delinquent);
• Banks and thrifts: 3.43 percent (90 or more days delinquent or in non-accrual).
Mortgage Bankers Association
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.
