MBA: Commercial, multifamily loan delinquencies fall in Q4

Investors with mortgages for multifamily and commercial properties during the final three months of last year showed improvements in on-time payments, as the Mortgage Bankers Association reports a drop in the delinquency rate for loans in both types of real estate.

Investors with mortgages for multifamily and commercial properties during the final three months of last year showed improvements in on-time payments, as the Mortgage Bankers Association reports a drop in the delinquency rate for loans in both types of real estate.

According to a report by the MBA, as well as analysis of mortgage records by the Federal Deposit Insurance Corporation, mortgages in the commercial and multifamily markets performed the best out of any kind of loans during the recession.

The delinquency rate on loans 60 days or more past due in the multifamily sector held in life company portfolios declined 0.02 percentage points to 0.17 percent, the report indicated. The rate also dropped modestly for loans 60 days or more delinquent that were held or backed by Freddie Mac and Fannie Mae.

Meanwhile, the delinquency rate for commercial loans held in mortgage-backed securities slipped 0.36 percentage points to 8.56 percent during the fourth quarter, according to the MBA.

"Commercial and multifamily mortgage delinquency rates continue to stabilize and improve in parallel with the broader economy," said MBA vice president of commercial real estate research Jamie Woodwell. "And counter to what many have predicted, commercial mortgages have proved to be neither 'the next shoe to drop' nor a 'ticking time bomb' for the banking sector or the economy as a whole."

Separate property data from Trepp, LLC also shows a decrease in the national CRE mortgage delinquency rate for loans held in mortgage-backed securities, but for the second month of 2012.

According to the analytics firm, the delinquency rate fell 15 basis points in February to 9.37 percent. The total value of past-due CRE loans at the end of the month was $56.4 billion.

"The resolution of these performing, but past maturity loans will likely determine whether the delinquency rate rises or falls over the next 12 months," said Trepp senior managing director Manus Clancy. "The rate should remain fairly stable if they are modified or refinanced, but watch out if these loans slide into foreclosure."



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