MBA Unveils Q4 Commercial/Multifamily Performance

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:

  • banks and thrifts had a delinquency rate of 0.45% for loans that were 90 or more days overdue or in non-accrual status. This represents a slight increase of 0.01 percentage points from the delinquency rate in Q3 2022;
  • the delinquency rate for life company portfolios was 0.11% for loans that were 60 or more days overdue. This represents an increase of 0.02 percentage points from the delinquency rate in Q3;
  • Fannie Mae had a delinquency rate of 0.24% for loans that were 60 or more days overdue. This represents a decrease of 0.02 percentage points from the delinquency rate in Q3;
  • the delinquency rate for Freddie Mac was 0.12% for loans that were 60 or more days overdue. This represents a slight decrease of 0.01 percentage points from the delinquency rate in Q3; and
  • the delinquency rate for CMBS was 2.90% for loans that were 30 or more days overdue or in Real Estate Owned (REO) status. This represents an increase of 0.13 percentage points from the delinquency rate in the previous quarter.

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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