Securitized commercial and multifamily mortgage delinquencies are at the highest level since the Mortgage Bankers Association started tracking such data in 1997.
Other investors for the most part reported low delinquency rates for the fourth quarter 2010.
Loans in commercial mortgage-backed securities had an 8.95% delinquency rate for the fourth quarter, up from 8.58% for the third quarter and 5.70% for the fourth quarter 2009.
The MBA report notes loans 30 days late are considered delinquent in this investor category; for life companies, Fannie Mae and Freddie Mac, its 60 days late and for banks and thrifts it is 90 days late. It put a note in the report that delinquency rates are not comparable across investor groups.
For life insurers, the delinquency rate is 0.19%, the same it was at the end of 2009, and three basis points lower from the end of the third quarter 2010.
Fannie Mae said its commercial delinquency rate is up 8 BPs from the end of 2009 vs. the end of 2010 at 0.71%, while for Freddie Mac it was up 11 BPs to 0.31%.
Bank and thrifts reported a delinquency rate of 4.19%, up from 3.92% at the end of 2009, but down from 4.41% for the third quarter 2010.
"The recession's downward pull on commercial and multifamily mortgage performance has slackened," said Jamie Woodwell, MBA's vice president of commercial real estate research. "The delinquency rates for commercial and multifamily mortgages at banks and thrifts appear to have peaked at levels well below those of the last recession, and the performance of loans held by life companies, Fannie Mae and Freddie Mac has been relatively strong throughout the downturn. The CMBS market has continued to see elevated levels of stress—although the rate of increase has moderated and some technical issues make a direct comparison of CMBS to other investor groups tricky."
The report contains a series of graphs showing delinquency trends over the last 10 years. For CMBS, banks & thrifts and Fannie Mae, delinquencies all spiked upwards starting in 2008. For Freddie Mac, there was a much smaller gain.
However, the graph plotting life companies shows delinquencies only touching high points seen earlier in the 10-year period. In fact, the highest recorded delinquency level for life companies was back when the series started with data from year-end 1996 and they reported a 1.79% rate. Data from life companies comes from the American Council of Life Insurers.
In a separate note, MBA said in 2010, commercial and multifamily mortgages continued to have the lowest charge-off rates of any major loan type at banks and thrifts. These loans also performed better.
At the end of the fourth quarter, 6.48% of all bank and thrift loans were 30 or more days late. Commercial mortgages had a delinquency rate of 5.33% while multifamily mortgages had a rate of 4.84%.
Construction loans had the highest delinquency rate, at 17.98%. Single-family mortgages were next at 9.97%. The rate for commercial and industrial loans was 3.14%, while for credit cards it was 4.15% and other was at 3.58%.
