About Those GSE Multifamily Losses (And Other Topics)

WASHINGTON, DC-On Tuesday we reported that the Inspector General of the Federal Housing Finance Agency wants to see new accounting methodologies used to better account for losses at the GSEs. Specifically, it wants to require Fannie Mae and Freddie Mac to charge off losses on loans on which borrowers have not made payments for 180 days. This begs the question for the commercial real estate space: how bad are those multifamily losses anyway?

Recently released figures by Freddie Mac show that they are low – indeed, losses have been historically very small in the GSEs’ multifamily portfolios. Freddie Mac reported that it recently secured one of the industry’s lowest delinquency rates at .09% as of June 30, 2013, compared to much higher rates in the industry for other lender and asset classes.