Commercial, Multifamily Mortgage Delinquencies Remain Low in U.S.

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CMBS Delinquencies Continue to Increase

According to the Mortgage Bankers Association's most recent Commercial/Multifamily Delinquency Report, delinquency rates for commercial and multifamily mortgage loans remained low in the fourth quarter of 2016.

"For most investor groups, commercial and multifamily mortgage delinquencies are at or near their all-time lows," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "Sixty-plus day delinquency rates at Freddie Mac, life companies and Fannie Mae are, respectively, 0.03 percent, 0.04 percent and 0.05 percent - all extraordinarily low.  The 30+ day delinquency rates for banks and thrifts are at their lowest on record, going back to 1993.  Only loans in commercial mortgage-backed securities continue to show elevated levels of delinquencies and loans in foreclosure, as the market continues to work through the large volume of mortgages made during the 2005 to 2007 time period."

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.  Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

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

• Banks and thrifts (90 or more days delinquent or in non-accrual): 0.59 percent, a decrease of 0.03 percentage points from the third quarter of 2016;

• Life company portfolios (60 or more days delinquent): 0.04 percent, a decrease of 0.04 percentage points from the third quarter of 2016;

• Fannie Mae (60 or more days delinquent): 0.05 percent, a decrease of 0.02 percentage points from the third quarter of 2016;

• Freddie Mac (60 or more days delinquent): 0.03 percent, an increase of 0.02 percentage points from third quarter of 2016;

• CMBS (30 or more days delinquent or in REO): 4.53 percent, an increase of 0.30 percentage points from the third quarter of 2016.