Delinquency rates ticked up slightly in 2Q08 for most commercial/multifamily mortgage investor groups, although they remained at the lower end of their historical ranges, according to a new Mortgage Bankers Association (MBA) report.
"Commercial/multifamily mortgages are not seeing the same kinds of deterioration in performance that single-family mortgages, construction and some other types of loans have seen," said Jamie Woodwell, MBA's vice president of commercial/multifamily research.
Woodwell added that although delinquency rates for most commercial/multifamily investor groups are a little higher in the last two quarters, it is important to note that the market is coming off record lows for the past year.The take away is that commercial/multifamily mortgage performance generally remains strong and well within expectations," Woodwell said.
The MBA said that between 1Q08 and 2Q08, the 30+ day delinquency rate on loans held in CMBS increased .05% points to .53%.The 60+ day delinquency rate on loans held in life company portfolios rose .02% to .03%.
The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae increased .02% to .11%. Meanwhile, the 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac fell .01% to 0.03%.
The 90+day delinquency rate on loans held by Federal Deposit Insurance Corp. (FDIC)-insured banks and thrifts rose 0.17% to 1.18%.
The MBA analysis examined commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. All together, these groups hold more than 80% of commercial/multifamily mortgage debt outstanding.
The analysis also incorporated the same measures used by each individual investor group to track loan performance, the MBA said.Since each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to the next.
In terms of the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the fourth quarter were as follows: CMBS0.53% (30+ days delinquent or in REO);life company portfolios 0.03% (60+days delinquent); Fannie Mae0.11% (60 or more days delinquent);Freddie Mac0.03% (60 or more days delinquent0; banks and thrifts1.18 % (90 or more days delinquent or in non-accrual).
To put these numbers in perspective, the MBA noted that of 35,276 commercial/multifamily loans in life company portfolios, with a total unpaid principal balance of $252 billion, only 23 loans with an aggregate UPB of less than $69 million were 60+ days delinquent at the end of 2Q08, according to the MBA.
Furthermore, of $1.2 trillion of commercial/multifamily mortgages at FDIC-insured banks and thrifts, only $15 billion was 90+ days delinquent, according to the MBA.