Commercial and multifamily loan performance continued to improve across the board as delinquency rates fell “for every major investor group,” said MBA’s VP of commercial real estate research Jamie Woodwell, especially “for loans held by life companies and the GSEs.”
Data are in line with other findings that indicate improvements are taking hold.
The MBA’s Commercial/Multifamily Delinquency Report—which includes commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac, and the five largest investor groups that together hold more than 80% of commercial/multifamily mortgage debt outstanding—also shows the 60-day or more delinquency rate for mortgages held in life-company portfolios decreased to 0.08%.
It was 7.45 percentage points lower than its 7.53% peak in the second quarter of 1992. Similarly the delinquency rate for multifamily loans held or insured by Freddie Mac was 6.72 percentage points lower than the series high of 6.81% during the fourth quarter of 1992, while for Fannie Mae the rate was 3.34 percentage points below its 3.62% high in the fourth quarter of 1991.
Improvements also entail the 90-day or more delinquency rate, which for loans held by FDIC-insured banks and thrifts that include loans backed by owner-occupied commercial properties, decreased 0.26 percentage points to 2.16%, at 4.42 percentage points lower than its 6.58% peak in the second quarter of 1991.
For loans held in CMBS also the 30-day or more delinquency rate was 1.21 percentage points below the series high of 9.02% in the second quarter of 2011, down 0.74 percentage points on a quarterly basis to 7.81%.
But at the same time, based on the unpaid principal balance of loans, delinquency rates at the end of the second quarter was 7.81% for CMBS investors whose portfolios had the highest number of loans 30 or more days delinquent or in REO.