CRE Loan Quality Continues To Improve Among All Major Lenders

Delinquency rates for commercial and multifamily mortgage loans continued to decline in the first quarter of 2014, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. 

During the first quarter of 2014, the 30+ day delinquency rate for loans held in commercial mortgage-backed securities (CMBS) decreased 0.69 percentage points to 6.16%. 

The 60+ day delinquency rate for multifamily loans held or insured by Fannie Mae was unchanged at 0.10%. The 60+ day delinquency rate for multifamily loans held or insured by Freddie Mac decreased 0.05 percentage points to 0.04%. 

The 60+ day delinquency rate for commercial and multifamily mortgages held in life company portfolios were unchanged at 0.05%. 

The 90+ day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.13 percentage points to 1.57%. 

“The last two quarters marked the largest percentage point declines in CMBS delinquency rates ever,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “We also see continued improvement in the performance of commercial mortgages held by banks and very low delinquencies in loans held by life insurance companies and the GSEs. With property incomes and values rising, loan performance should continue to benefit.” 

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the first quarter were as follows: 

• Life company portfolios: 0.05% (60 or more days delinquent); 
• Freddie Mac: 0.04% (60 or more days delinquent); 
• Fannie Mae: 0.10% (60 or more days delinquent); 
• Banks and thrifts: 1.57% (90 or more days delinquent or in nonaccrual); 
• CMBS: 6.16% (30 or more days delinquent or in REO). 
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