CMBS loan delinquency rates fall for fifth quarter in a row: MBA

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The performance of loans included in commercial mortgage-backed securities improved for the fifth consecutive quarter, with delinquencies down 179 basis points over the time frame, according to the Mortgage Bankers Association.

CMBS loans that are at least 30 days late or real estate owned fell 47 basis points to 3.05% in the third quarter.

In the second quarter, CMBS loans had a 3.52% delinquency rate, while in the third quarter last year the rate was 4.6%. At its most recent peak in the second quarter of 2017, the delinquency rate was 4.84%.

The MBA report compiles delinquency rates across five investor types and used the measurement standard each group established. As a result, comparisons across investor types is not possible.

"Loans held in CMBS have a higher 'headline' delinquency rate because of the way the industry reports on those loans," Jamie Woodwell, vice president for commercial real estate research, said in a press release. "However, when excluding loans in foreclosure or REO — which are generally omitted from the calculations for the other groups — the CMBS delinquency rate is just 45 basis points, the same level as December 2005."

Among banks and thrifts, where the measurement is loans that are 90 days or more late or in non-accrual status, the delinquency rate set a new series low at 0.48%, Woodwell said. This was down 2 basis points from the second quarter and 5 basis points from one year prior.

The only investor type that saw an increase in its delinquency rate was life insurers, where 0.04% of mortgage investments were 60 days or more late, up 1 basis point from the prior quarter and 2 basis points year-over-year.

For Fannie Mae multifamily loans, the 60-day delinquency rate fell 3 basis points from the second quarter to 0.07%, but this was 4 basis points higher than one year ago.

Freddie Mac's 60-day delinquency rate of 0.01% was unchanged from the second quarter and down 1 basis point from the third quarter of 2017.

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Delinquencies Distressed REO GSEs Multifamily Commercial lending Mortgage Bankers Association Fannie Mae Freddie Mac