Commercial/MF Originations Set Record

Originations of commercial and multifamily loans jumped to $44.4 billion in the second quarter, setting a new record, according to the Mortgage Bankers Association.The volume was 25% higher than originations for the second quarter of 2004. However, mortgage banker originations for Fannie Mae dropped 13% from the level recorded in the second quarter of 2004, originations for Freddie Mac dropped 47%, originations for the Federal Housing Administration dropped 34%, and originations for pension funds dropped 75%, the MBA said. "Capital continues to flow into the commercial and multifamily real estate markets on both the debt and equity sides," said MBA chief economist Doug Duncan. "And so far, no significant obstacles to that flow have appeared, whether in the form of higher interest rates, declining loan performance, or declining property performance." Commercial mortgage-backed securities conduits bought 43% of the loans originated in the second quarter, followed by commercial banks, at 23%, the MBA said. The increase in lending activity was across all property types, with lending on hotel properties seeing a 189% increase from that of the second quarter of 2004. The MBA can be found online at http://www.mortgagebankers.org.