Commercial and Multifamily Delinquencies Continue to Improve

by devteam December 6th, 2012 | Share

Commercial and multifamily delinquency rates</bdeclined during the third quarter according to the Mortgage Bankers Associationrn(MBA) Commercial/Multifamily Delinquency Report except for loans held by FreddiernMac which remained unchanged.  Delinquencyrnrates for all investor groups improved year-over-year.</p

Each of the five investor groups trackedrnby the use a different schedule with Commercial/Multifamily Mortgage-BackedrnSecurities (CMBS) reporting as of 30+ days past due; Banks and Thrifts use arn90+ benchmark and Fannie Mae and Freddie Mac along with Life InsurancernCompanies report 60+ day delinquencies.  </p

Loans held in CMBS reported arndelinquency rate of 8.86 percent compared to 8.97 percent in the second quarterrnand 8.92 percent in the third quarter of 2011. rnThe current delinquency rate is 0.16 percentage points below the seriesrnhigh (9.02 percent) reached in the second quarter of 2011.</p


The delinquency rate for loans held byrnBanks and Thrifts was 2.93 percent, down from 3.11 in the second quarter andrn3.76 percent one year earlier.  Thernseries high of 6.58 percent was reached in the second quarter of 1991 howeverrnthe recent high was 4.41 percent in the third quarter of 2010.</p


Fannie Mae’s rate was down one basisrnpoint from the previous quarter to 0.28 percent and 29 basis points lower thanrnin the third quarter of 2011.  FreddiernMac’s rate was unchanged at 0.27 percent but was down 6 basis points from thernthird quarter of 2011 when it reached the highest rate during the currentrncrisis of 0.31 percent.   Fannie Mae’s rate was 3.34 percent below thernseries high of 3.62 percent in the fourth quarter of 1991.  Its portfolio peaked in the current crisis atrn0.80 percent in the second quarter of 2010. rnFreddie Mac reached a series high of 6.81 percent in the fourth quarterrnof 1992. </p


The lowest delinquency rate is amongrnloans held by life insurance companies at 0.12 percent.  This is 3 basis points lower than the secondrnquarter rate and down 7 basis points from the third quarter of 2011.  The series high was in the second quarter ofrn1992 (7.53 percent).  Delinquencies inrnthese portfolios reached 0.29 percent in the second quarter of 2010.</p


“Commercial and multifamily mortgagerndelinquency rates for loans held by life companies, Fannie Mae and Freddie Macrnall remain extremely low,” Jamie Woodwell, MBA’s Vice President of CommercialrnReal Estate Research said.  “Therndelinquency rate on bank-held loans is at its lowest level since the beginningrnof 2009 and the delinquency rate for loans held in CMBS – while still elevated -rncontinues to stabilize.  If one removesrnthe CMBS loans that are in foreclosure or REO, that delinquency rate is at itsrnlowest since late 2009.”

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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