Growth of CRE Debt Slows in 1Q

The level of commercial and multifamily mortgage debt outstanding grew by 1.8% in the first quarter to $3.4 trillion, according to the Mortgage Bankers Association. The $3.4 trillion was an increase of $60.8 billion from the fourth quarter of 2007. Multifamily mortgage debt outstanding grew to $856 billion, an increase of $18.5 billion, or 2.2%, from the fourth quarter. "Investors continue to increase their holdings of commercial/multifamily mortgages," said Jamie Woodwell, MBA's senior director of commercial/multifamily research.

"The global credit crunch meant a net decline in the balance of mortgages held in CMBS, CDO and other ABS, but banks, thrifts, life insurance companies, Fannie Mae, Freddie Mac and nearly every other investor group increased their holdings of commercial and multifamily mortgages during the quarter." Commercial banks continue to hold the largest share of commercial and multifamily mortgages, $1.43 trillion, or 42% of the total. Many of the commercial mortgage loans reported by commercial banks, however, are actually "commercial and industrial" loans to which a piece of commercial property has been pledged as collateral. It is the borrower's business income - not the income derived from the property's rents and leases - that drives the performance of these loans. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/

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