Commercial, Multi-family Delinquency Rates Remain Elevated

Delinquency rates for commercial andrnmulti-family mortgages continued to rise in CMBS portfolios during the secondrnquarter of 2012 and now stand at 8.97 percent, 12 basis points from the firstrnquarter rate.  This rate has risen in 12rnof the 14 quarters the Mortgage Bankers Association has tracked them.  In the first quarter of 2009 the rate stoodrnat 1.86 percent.  Delinquency rates alsornincreased for mortgages held by life insurance companies and Freddie Mac.  </p

Mortgages held by life insurancerncompanies went up only a slight 0.01 percent to 0.15 percent while loans heldrnor insured by Freddie Mac increased 0.04 percentage points to 0.27rnpercent.  Rates held by the other tworninvestor groups declined; Fannie Mae’s holdings had a rate decrease of 0.08</bpercentage points to 0.29 percent and the rate for loans held by FDIC-insuredrnbanks and thrifts decreased 0.34 point to 3.11 percent, the fifth consecutivernquarter that rate has dropped.  Onernreason for the discrepancies in delinquency rates is the extent of therndelinquency considered “serious” by the investor.  CMBS rates are 30+ delinquencies while 60+ isrnthe benchmark for mortgages held by life insurance companies, Fannie Mae andrnFreddie Mac.  Banks and thrifts regulatedrnby FDIC consider 90+ days a serious delinquency. </p