Commercial real estate loans held by commercial banks and in CMBS are experiencing higher delinquency rates than CRE loans held by other investors, according to a new report from the Mortgage Bankers Association (MBA).
Banks hold nearly 45% of the outstanding $3.4 trillion in CRE and multifamily mortgages on their books and 20% are packaged into CMBS, according to MBA's newly released CRE Quarterly Data Book for the third quarter.
"While loans held by banks and thrifts and CMBS are experiencing stress roughly on par with the stress with what was seen following the stress of the late-1980s/early-1990s, loans held by life insurance companies, Fannie Mae and Freddie Mac are performing far better than the experience of that time," MBA says. Thrifts hold 5.6% of CRE and multifamily loans.
The Quarterly Data Book also showed that commercial banks have reduced their CRE lending over the past three years.
In the 3Q09,banks originated $62 billion in CRE/multifamily loans, down 52% from the same period a year ago.
Meanwhile, Fannie and Freddie originated $143 billion in multifamily loans in the third quarter, down 31% from the same period in 2008.