Multifamily

Fewer of these mortgages are paying off, adding to the amount of credit on investors' books, the Mortgage Bankers Association said.

Decreased availability of bank capital for new commercial construction helped slow activity from the previous nine quarters, according to a new report.

But overall volume is still expected to be 38% lower than 2022's commercial real estate originations, as higher interest rates remain a drag.

But when compared past periods of upheaval, those rates remain relatively low, the Mortgage Bankers Association report showed.

Economic turbulence affected borrowers during the quarter and will likely impact their ability to refinance maturing loans, the Mortgage Bankers Association said.

The underlying loans are subject to certain ATR rules per the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Shellpoint Mortgage Servicing, will fund advances of delinquent principal and interest until loans become 90 days.

Weaker economic conditions, rising interest rates and expected changes in investment returns drove the reduced expectations, the Mortgage Bankers Association said.

The sector is not immune to the same economic instability that affects the single-family residential market, the Mortgage Bankers Association said.

Volumes set a record in 2021 and they've held up better than expected this year, but declines are forecasted for the sector some banks are using to partially offset single-family's slump.

Some 75% of the loans, or a count of 38, are partial term interest-only (IO) loans, and just six, or 22.9% of the pool are full-term IO loans. Just one loan, has an amortizing balloon.