Commercial/Multifamily Delinquencies Continue to Decline in First Quarter

CONTACT
Ali Ahmad
aahmad@mba.org
(202) 557- 2727

WASHINGTON, D.C. (June 1, 2015) - Delinquency rates for commercial and multifamily mortgage loans continued to decline in the first quarter of 2015, according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report.

"Commercial and multifamily mortgage performance continues to improve. Increasing property incomes, rising property values and a strong finance market are working together to push delinquency rates lower," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. 

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), life insurance companies, Fannie Mae, and Freddie Mac.  Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the first quarter were as follows:

  • Life company portfolios (60 or more days delinquent): 0.06 percent, a decrease of 0.02 percentage points from the fourth quarter of 2014;
  • Freddie Mac  (60 or more days delinquent): 0.03 percent, a decrease of 0.01 percentage points from the fourth quarter of 2014;
  • Banks and thrifts (90 or more days delinquent or in non-accrual): 1.03 percent, a decrease of 0.11 percentage points from the fourth quarter of 2014;
  • CMBS (30 or more days delinquent or in REO): 5.17 percent, a decrease of 0.19 percentage points from the fourth quarter of 2014;
  • Fannie Mae (60 or more days delinquent): 0.09 percent, an increase of 0.04 percentage points from the fourth quarter of 2014.

The analysis incorporates the same measures used by each individual investor group to track the performance of their loans.  Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.

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 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.

Differences between the delinquencies measures are detailed in Appendix A. To view the report, please click here.

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