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The Next Loan Default frontier

MBA Reports Continued Rise In Commercial Delinquencies


Delinquency rates continued to increase in the fourth quarter for most commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report.

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

  • commercial mortgage-backed securities - 5.69% (30+ days delinquent or in REO), a 1.63 percentage point increase from the third quarter;
  • life company portfolios - 0.19% (60+days delinquent), a 0.04 percentage point decrease;
  • Fannie Mae - 0.63% (60+ days delinquent), a 0.01 percentage point increase;
  • Freddie Mac - 0.15% (90+ days delinquent), a 0.04 percentage point increase; and
  • banks and thrifts - 3.92% (90+ days delinquent or in non-accrual), a 0.49 percentage point increase.

The analysis incorporates the same measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another. In total, the above five investor groups hold more than 80% of commercial/multifamily mortgage debt outstanding.

“The ongoing impact of the economic fallout on commercial real estate markets continued to drive up commercial and multifamily mortgage delinquencies for most investor groups in the fourth quarter,” says Jamie Woodwell, MBA’s vice president of commercial real estate research. “Continued job losses, consumer restraint and a lack of household growth all sustained the pressure on commercial real estate operations and mortgages during the fourth quarter.”

By MortgageOrb.com - March 11, 2010

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