Commercial, Multifamily Originations Drop 46% in 2009: MBA

The volume of commercial and multifamily mortgages originated in 2009 declined 46% from a year earlier, to $82.3bn of loans, according to an annual report by the Mortgage Bankers Association (MBA). While the volume of multifamily mortgages closed for government-sponsored enterprises (GSEs) Freddie Mac (FRE) and Fannie Mae (FNM) both fell from 2008, but loans closed for Ginnie Mae securities posted a surprise 168% growth over last year. Commercial banks and savings institutions were the largest investor group in 2009, accounting for $19.8bn, or 24%, of the closed loan volume. Multifamily mortgages represented the dominant collateral type, accounting for $36.5bn, or 44%, of the lending total. “Relatively few commercial mortgages were made in 2009, as the recession curtailed both the supply of and demand for new mortgage debt,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “As the recession has receded, origination volumes have picked up slightly, but the absolute levels remain low.” Declines in investor groups were led by mortgage real estate investment trusts (REITs), investment funds, commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset-backed security (ABS) conduits. Fannie Mae multifamily loans declined 32% from 2008 to $15.9bn in 2009, while Freddie Mac loans slipped 24% to $15.2bn. Federal Housing Administration (FHA)-insured loans closed for Ginnie Mae securities grew 168% from last year to $5.8bn. Loans for Fannie and Freddie accounted for 85% of the total multifamily volume in 2009. Write to Diana Golobay. Disclosure: the author holds no relevant investments.

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