Commercial and Multifamily Mortgage Delinquency Rates Remain Low in Second-Quarter 2022
Commercial and multifamily mortgage
delinquencies declined in the second quarter of 2022, according to the Mortgage
Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report.
“Delinquency rates for commercial
and multifamily mortgages fell again during the second quarter of 2022,” said
Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Many
capital sources are seeing delinquency rates at or approaching pre-pandemic
levels, which were some of the lowest delinquency rates on record. MBA survey
data have shown significant differences by property type as the COVID-19
pandemic’s effects have morphed. These property-type differences,
particularly across changing economic conditions, will continue to be a key factor
in commercial and multifamily loan performance.”
MBA’s quarterly 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, and Fannie Mae and Freddie Mac.
Together, these groups hold more than 80 percent of commercial/multifamily
mortgage debt outstanding. MBA’s analysis incorporates the 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. As just one example, Fannie Mae
reports loans receiving payment forbearance as delinquent, while Freddie Mac
excludes those loans if the borrower is in compliance with the forbearance
agreement.
Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the second quarter of 2022 were as follows:
- Banks and thrifts (90 or more days delinquent or in non-accrual): 0.49 percent, a decrease of 0.07 percentage points from the first quarter of 2022;
- Life company portfolios (60 or more days delinquent): 0.04 percent, a decrease of 0.01 percentage points from the first quarter;
- Fannie Mae (60 or more days delinquent): 0.34 percent, a decrease of 0.04 percentage points from the first quarter;
- Freddie Mac (60 or more days delinquent): 0.07 percent, a decrease of 0.01 percentage points from the first quarter; and
- CMBS (30 or more days delinquent or in REO): 2.95 percent, a decrease of 0.41 percentage points from the first quarter.
Construction and development loans
are generally not included in the numbers presented in this report 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 download current report go to: www.mba.org/news-and-research/research-and-economics/commercial-multifamily-research/commercial-multifamily-mortgage-delinquency-rates.
To better understand the ways the
COVID pandemic is and is not affecting commercial mortgage performance, MBA
worked with its servicer members to develop the CREF Loan Performance
Survey.
For more information on the most recent results and the historical series go to: www.mba.org/home/product/commercial-multifamily-loan-performance-survey-73258.