InvestmentsMortgageReal Estate

MBA: Commercial, multifamily mortgage delinquencies remain historically low

Commercial mortgages continue stellar performance

Delinquency rates on commercial and multifamily mortgages stayed nearly historic lows during the third quarter, the Mortgage Bankers Association reported this week.

“Commercial and multifamily mortgage delinquency rates are extremely low right now,” MBA Vice President for Commercial Real Estate Research Jamie Woodwell said.

According to Woodwell, the delinquency rate for loans held on bank balance sheets hit a new series low, while delinquency rates for loans held by life companies or those guaranteed by Fannie Mae and Freddie Mac are all still below 10 basis points.

Broken down by loan type, based on unpaid principal balance of loans, delinquency rates for each group at the end of the third quarter were:

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.48%, a decrease of 0.02 percentage points from the second quarter
     
  • Life company portfolios (60 or more days delinquent): 0.04%, an increase of 0.01 percentage point from the second quarter
     
  • Fannie Mae (60 or more days delinquent): 0.07%, a decrease of 0.03 percentage points from the second quarter
     
  • Freddie Mac (60 or more days delinquent): 0.01%, unchanged from the second quarter
     
  • Commercial mortgage-backed securities (30 or more days delinquent or in REO): 3.05%, a decrease of 0.47 percentage points from the second quarter

In the report, Woodwell explained that loans held in CMBS have a higher “headline” delinquency rate due to the way the industry reports on those loans.

“But if one pulls out loans in foreclosure or real estate owned–which are generally excluded from the calculations for the other groups–the CMBS delinquency rate is just 45 basis points, the same level as December 2005,” Woodwell said.

The MBA notes in its report that its analysis incorporates the measures used by each individual investor group to track the performance of their loans. And because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.

About the Author

Most Popular Articles

Housing market flashing recession signal

The housing market is signaling there will be an economic recession by the 2020 election, according to Benn Steil, director of international economics at the Council on Foreign Relations. “When income fails to keep pace with home prices, the latter must fall back,” the post said. “Falling home prices, in turn, drive down household spending.”

Oct 11, 2019 By

Latest Articles

Pennsylvania sues rent-to-own operator Vision Property Management for preying on low-income renters

Vision Property Management has already run into trouble in Wisconsin and New York, with each state claiming that the company’s rent-to-own business model is actually a scam designed to prey on low-income individuals who want to buy a home. And now, the company has another state to deal with: Pennsylvania.

Oct 11, 2019 By