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Commercial/multifamily debt outstanding decreases slightly in 4Q: MBA

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The amount of commercial and multifamily mortgage debt outstanding slightly decreased in the fourth quarter, according to Mortgage Bankers Association analysis of the Federal Reserve Board's flow of funds. Mortgage debt outstanding for the two sectors combined dropped by $12 billion, or 0.5%, to $2.4 trillion from the third quarter to the fourth quarter, according to the MBA. Compared to 2009, mortgage debt outstanding in the two sectors was down 2.7% or $67 billion. The trade organization attributed the decline to a decrease in the amount of commercial mortgage-backed securities loans outstanding. "The $50 billion dollars of CMBS loans that paid-off, paid down or were resolved during the year represented 75% of the total decline," said Jamie Woodwell, MBA's vice president of commercial real estate research. Commercial banks held the largest share of commercial/multifamily mortgages in the fourth quarter with 34%, or $802 billion, which was down $628 billion from the third quarter. The second largest group of holders of commercial/multifamily mortgage loans in fourth quarter was issuers of CMBS, collateralized debt obligations and asset-backed securities at $621 billion, or 26% of the market. Agency, government-sponsored enterprise portfolios and mortgage-backed securities accounted for $325 billion, or 14% of the market share. Analyzing the multifamily sector alone, the MBA found that mortgage debt outstanding actually increased to $798 billion, up 0.3% or $3 billion from the previous quarter. Woodwell said agency interaction in the multifamily sector drove up debt at the end of the year. "Strong originations by (Federal Housing Administration), Fannie Mae and Freddie Mac led to an increase in the level of multifamily mortgages outstanding," Woodwell said. GSE portfolio volumes on multifamily loans saw the biggest increase during the three months ended Dec. 31, up 2% or $7 billion. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.

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