MBA Reports Commercial and Multifamily Mortgage Delinquency Rates Continued to Rise in First Quarter
(News Source: Mortgage Bankers Association)
(WASHINGTON, DC) -- The weakening economy and continued credit crunch led to increases in commercial/multifamily mortgage delinquencies during the first quarter of 2009, according to the Commercial/Multifamily Delinquency Report, released today by the Mortgage Bankers Association (MBA).
"Commercial and multifamily mortgage delinquency rates continued to rise in the first quarter," said Jamie Woodwell, Vice President of Commercial Real Estate Research at the Mortgage Bankers Association. "Delinquency rates on commercial and multifamily mortgages held by banks and thrifts, by Fannie Mae and in commercial mortgage-backed securities (CMBS) are all now at levels higher than at any time since the 2001 recession. First quarter delinquency rates on commercial mortgages held by life insurance companies remained below the 2001 recession levels."
Between the fourth quarter of 2008 and first quarter of 2009, the 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 0.68 percentage points to 1.85 percent. The 60+ day delinquency rate on loans held in life insurance company portfolios rose 0.05 percentage points to 0.12 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.04 percentage points to 0.34 percent. The 90+ day delinquency rate on multifamily loans held or insured by Freddie Mac rose 0.08 percentage points to 0.09 percent. (Note that in June 2008, Freddie Mac began reporting multifamily delinquencies as those loans 90+ days delinquent. Prior to that time the reported numbers are for loans 60+ days delinquent). The 90+day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.66 percentage points to 2.28 percent.
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.
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.
Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the first quarter were as follows:
- CMBS: 1.85 percent (30+ days delinquent or in REO);
- Life company portfolios: 0.12 percent (60+days delinquent);
- Fannie Mae: 0.34 percent (60 or more days delinquent)
- Freddie Mac: 0.09 percent (90 or more days delinquent);
- Banks and thrifts: 2.28 percent (90 or more days delinquent or in non-accrual).