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Record Decline in Commercial Mortgage-Backed-Securities Delinquency

by devteam September 5th, 2013 | Share

Delinquency rates for commercial and multifamilyrnmortgages loans improved in the second quarter of 2013 across all of the majorrngroups that invest in them.  The MortgagernBankers Association’s (MBA) Commercial/Multifamily Delinquency Report releasedrnon Wednesday  showed a particularlyrnstrong decline in the mortgage rate for loans held in commercialrnmortgage-backed securities (CMBS), calling it the largest on record.rn</p

The 30+ day delinquency rate for CMBS portfoliosrndropped by 74 basis points during the quarter, from 8.55 percent to 7.81rnpercent.  The rate had hit its post-crashrnpeak in the second quarter of 2011 at 9.02 percent and was at 8.97 percent atrnthe end of the second quarter of 2012.</p

The 90+ day delinquency rate for loansrnheld by banks and thrifts declined from 2.42 percent at the end of the firstrnquarter to 2.16 percent in the second.   The rate at the end of the same quarter arnyear earlier was 3.12 percent.</p

Loans held in life insurance companyrnportfolios had remained low throughout the recession and post-recession period,rntopping out at a 60+ day rate under .3 percent. rnAt the end of the second quarter the rate was at 0.08 percent, down onernbasis point from the first quarter.</p

Multifamily loans held by Fannie Mae hadrnreached a peak 60+ day delinquency rate of .80 percent in the second quarter ofrn2010 percent and Freddie Mac’s 60+ day rate peaked at 0.36 percent in the firstrnquarter of 2011. In the most recent quarter the rate for Fannie Mae’s loans wasrn.28 percent, 11 basis points below that of the first quarter.  The rate for Freddie Mac’s multifamilyrnportfolio was down .07 point to 0.9 percent. rn</p

Commercial and multifamily loan performance continued to improve duringrnthe second quarter, with delinquency rates falling for every major investorrngroup,” said Jamie Woodwell, MBA’s Vice President of Commercial Real EstaternResearch. “The quarterly decline in the delinquency rate of loans held inrncommercial mortgage-backed securities (CMBS) was the largest on record, andrndelinquency rates for loans held by life companies and the GSEs remain low andrnfell lower during the quarter.”</p

The five large investor groups included in MBA’s delinquencyrnanalysis together hold more than 80 percent of outstandingrncommercial/multifamily mortgage debt.

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About the Author

devteam

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

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