Multifamily

Mounting economic fallout from the pandemic is fueling apartment landlords' concerns that more tenants will struggle to make their rent payments, even after most managed to come up with the money for April.

Tenants have threatened to suspend payments during the pandemic to pressure officials into providing rental assistance, but the effects on multifamily loans would compound concerns about servicers' liquidity and, ultimately, lenders' performance.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

Add continued growth in commercial and multifamily mortgage debt outstanding to the list of things that the economic fallout from the coronavirus might affect.

The falling rates continue a three-year trend of improving performance across numerous commercial mortgage sectors including multifamily, office and retail.

Any impact from the coronavirus outbreak on commercial and multifamily loan delinquencies won't be known for some time, the Mortgage Bankers Association said.

Most of the pool is made up of office-property loans, but also includes a sizeable exposure to hotel and retail properties.

Black Knight introduced a model to gauge prepayment speeds and credit risk for investors that purchase commercial mortgage-backed securities.

Fannie Mae identified the adoption of hedge accounting and regular issuance of multifamily Connecticut Avenue Securities deals as among strategies it could continue to pursue while navigating regulatory uncertainties and change.

The delinquency rate for commercial mortgage-backed securities ended 2019 at its lowest point in nearly 11 years, aided by increased issuance and the resolution of legacy transactions, Fitch Ratings said.