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CRE Debt Outstanding Approaches $3 Trillion

Commercial and multifamily mortgage debt outstanding reached $2.845 trillion in the third quarter, an increase of 2.9% from the second quarter, the Mortgage Bankers Association reports, based on an analysis of the Federal Reserve's Flow of Funds data.

Multifamily mortgage debt outstanding alone grew to $714 billion at the end of the third quarter, an increase of $10.8 billion or 1.5% from the second quarter, the MBA said.

"Nearly every investor group increased their stake in commercial/multifamily mortgages in the third quarter," said Jamie Woodwell, MBA's senior director of commercial/multifamily research.

"As investors assess different investment options for their capital, commercial/multifamily mortgages continue to attract a great deal of interest."

The Federal Reserve flow of funds data summarizes the holding of whole loans or, if the loans are securitized, the form of the security.

Commercial banks continue to hold the largest share of commercial and multifamily mortgages, with more than $1.2 trillion, or 44% of the total (this includes "commercial and industrial" loans as well as loans on income-producing commercial real estate).

Commercial mortgage-backed securities issuers, collateralized debt obligations issuers and other asset-backed securities pools are the second largest holders of commercial and multifamily mortgages, at $583 billion, or 21% of the total.

Life insurance companies hold $279 billion, or 10% of the total, and savings institutions hold $212 billion, or 8% of the total.

Fannie Mae, Freddie Mac and Ginnie Mae hold $137 billion in multifamily loans that support the mortgage-backed securities they issue (which the MBA refers to as federally-related mortgage pools) and an additional $79 billion whole loans in their own portfolios, for a total share of 8% of outstanding commercial and multifamily mortgages.

Considering just multifamily mortgage debt outstanding, the multifamily holdings of the government-sponsored enterprises and Ginnie Mae, in the form of portfolio loans and federally related mortgage pools, place them ahead of other investor groups, at 30% of the total. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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