Commercial, multifamily mortgage delinquencies remain low in Q4

by Francis Monfort08 Mar 2018

The five largest investor groups saw continuously low delinquency rates for commercial and multifamily mortgage loans in the fourth quarter, with rates remaining relatively flat from the third quarter, according to the Commercial/Multifamily Delinquency Report released by the Mortgage Bankers Association (MBA).

The report covers commercial and multifamily delinquency rates for commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae, and Freddie Mac, which together hold more than 80% of outstanding commercial and multifamily mortgage debt.

Loans that were 90 or more days delinquent or in non-accrual at banks and thrifts were at a rate of 0.51%, down 0.02 percentage points from the previous quarter. Life company portfolios had a rate of 0.03% for loans 60 or more days delinquent, ticking up 0.01 percentage points from the third quarter.

Fannie Mae had loans 60 or more days delinquent at a rate of 0.11%, edging up 0.08 percentage points from the prior period. Loans at Freddie Mac that were 60 or more days delinquent were at a rate of 0.02%, holding steady quarter over quarter. Meanwhile, 4.08% of CMBS loans were 30 or more days delinquent or in REO, slipping 0.52 percentage points from the third quarter.

"Commercial and multifamily mortgages ended 2017 continuing to perform extraordinarily well," said Jamie Woodwell, MBA's vice president of commercial real estate research. "The market tailwinds of strong fundamentals, increasing property values, and ready access to mortgage and other credit all put downward pressure on delinquency rates."

MBA said the delinquency rates for each investor group are not comparable from one group to another because the analysis incorporates the measures used by each group to track the performance of their loans.

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