Commercial and multifamily delinquency rates
declined during the third quarter according to the Mortgage Bankers Association
(MBA) Commercial/Multifamily Delinquency Report except for loans held by Freddie
Mac which remained unchanged. Delinquency
rates for all investor groups improved year-over-year.
Each of the five investor groups tracked
by the use a different schedule with Commercial/Multifamily Mortgage-Backed
Securities (CMBS) reporting as of 30+ days past due; Banks and Thrifts use a
90+ benchmark and Fannie Mae and Freddie Mac along with Life Insurance
Companies report 60+ day delinquencies.
Loans held in CMBS reported a
delinquency rate of 8.86 percent compared to 8.97 percent in the second quarter
and 8.92 percent in the third quarter of 2011.
The current delinquency rate is 0.16 percentage points below the series
high (9.02 percent) reached in the second quarter of 2011.
The delinquency rate for loans held by
Banks and Thrifts was 2.93 percent, down from 3.11 in the second quarter and
3.76 percent one year earlier. The
series high of 6.58 percent was reached in the second quarter of 1991 however
the recent high was 4.41 percent in the third quarter of 2010.
Fannie Mae's rate was down one basis
point from the previous quarter to 0.28 percent and 29 basis points lower than
in the third quarter of 2011. Freddie
Mac's rate was unchanged at 0.27 percent but was down 6 basis points from the
third quarter of 2011 when it reached the highest rate during the current
crisis of 0.31 percent. Fannie Mae's rate was 3.34 percent below the
series high of 3.62 percent in the fourth quarter of 1991. Its portfolio peaked in the current crisis at
0.80 percent in the second quarter of 2010.
Freddie Mac reached a series high of 6.81 percent in the fourth quarter
The lowest delinquency rate is among
loans held by life insurance companies at 0.12 percent. This is 3 basis points lower than the second
quarter rate and down 7 basis points from the third quarter of 2011. The series high was in the second quarter of
1992 (7.53 percent). Delinquencies in
these portfolios reached 0.29 percent in the second quarter of 2010.
"Commercial and multifamily mortgage
delinquency rates for loans held by life companies, Fannie Mae and Freddie Mac
all remain extremely low," Jamie Woodwell, MBA's Vice President of Commercial
Real Estate Research said. "The
delinquency rate on bank-held loans is at its lowest level since the beginning
of 2009 and the delinquency rate for loans held in CMBS - while still elevated -
continues to stabilize. If one removes
the CMBS loans that are in foreclosure or REO, that delinquency rate is at its
lowest since late 2009."