Mortgage News March 29, 2023
Despite the rise in mortgage rates in the fourth quarter of 2020, commercial and multifamily delinquency rates remained low. The Mortgage Bankers Association reported that the delinquency rates for five major investor groups, including commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae, and Freddie Mac, remained stable. Over 80% of the outstanding commercial/multifamily mortgage debt is held by these groups. Although there were minor upticks in delinquency rates for loans in CMBS, life companies, and banks, and decreases for Fannie Mae and Freddie Mac, the overall loan performance remained positive. The delinquency rates for each group at the end of the fourth quarter were determined based on the unpaid principal balance of loans, with the following results:
Despite the positive results, Jamie Woodwell, head of commercial real estate research at MBA, stated that as higher interest rates and softer property values work through the system this year, loan performance is likely to adjust. This could be due to maturing and adjustable-rate loans prompting adjustments in loan performance. However, the commercial and multifamily delinquency rates remained stable at the end of 2020, providing a positive outlook for the industry.
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