MBA: Commercial Originations Surged in '05

Originations of commercial and multifamily loans were 48% higher in 2005 than in 2004, according to the Mortgage Bankers Association.Fourth-quarter 2005 originations were also 16% higher than third-quarter originations, and the highest ever recorded in the trade association's quarterly survey, according to the MBA. "The favorable conditions that led to records in 2005, such as continued low interest rates, an abundance of capital, and a strong economy, should remain strong as we progress through 2006," said MBA chief economist Doug Duncan. For 2005, originations for commercial banks rose 60%, commercial mortgage-backed securities conduit originations rose 83%, and originations for life insurance companies increased 25%. Multifamily was the dominant property type for the year, accounting for 36% of originations. In a press briefing at the MBA's commercial real estate finance convention in Orlando, Fla., Mr. Duncan said he expects this year to be as good as 2005, or even better, in terms of loan production. He said he expects consumer spending to slow down this year, and his forecast calls for the 10-year Treasury note to be in the 4.8%-5.0% range and for the Federal Reserve to raise its target federal funds rate at least once more.