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Commercial/Multifamily Mortgage Delinquencies

Commercial/Multifamily Mortgage Delinquency Rates Mixed in First Quarter

First Quarter 2011

Delinquency rates among different commercial/multifamily mortgage investor groups were mixed in the first quarter of 2011, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

The delinquency rate for loans held in CMBS reached the highest level since the series began in 1997, but the climb was slower than in recent quarters. Delinquency rates for other groups remain below levels seen in the last major real estate downturn during the early 1990’s, some by large margins.

points lower than the series high

(7.37

percent 1993);

reached during the fourth quarter of the rate for multifamily loans held

by Fannie Mae was

2.98 percentage points

below

the

series

high

(3.62

percent,

reached and the Freddie

during the fourth quarter of 1991); rate for multifamily loans held by Mac was 6.45 percentage points

lower than the series reached in 1992).

high

(6.81

percent

Please note: In March 2011, MBA

released

a DataNote covering the performance commercial and multifamily mortgages

of at

commercial banks and thrifts over the entire

Between the fourth quarter of 2010 and first quarter of 2011, the 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained the same at 4.18 percent. The 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) increased 0.23 percentage points to 9.18 percent. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.05 percentage points to 0.14 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae decreased 0.07 percentage points to 0.64 percent. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.10 percentage points to 0.36 percent.

The first quarter 2011 delinquency rate for commercial and multifamily mortgages held by banks and thrifts was 2.40 percentage points lower than the series high (6.58 percent reached in the second quarter of 1991). The rate for loans held in CMBS was

a record delinquency

high rate

for for

the series. commercial

The and

multifamily mortgages held in life insurance company portfolios was 7.23 percentage

year

2010.

The

DataNote

found

that

commercial

and

multifamily

mortgages

had

the

lowest

charge-off

rates

of

any

major

loan than held

type and had delinquency rates lower the overall book of loans and leases

by

banks

and

thrifts.

The

DataNote

can be found www.mortgagebankers.org/research

at:

Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-

occupied commercial properties.

The MBA analysis

looks

at

commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial

mortgage-backed

securities

(CMBS),

insurance

companies,

Freddie

Mac.

Together

Fannie Mae these groups

life and hold

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