Jamie Woodwell of the Mortgage Bankers Association

WASHINGTON, DC—Delinquencies on commercial and multifamily mortgage loans remained flat or decreased in the first quarter, the Mortgage Bankers Association said Thursday. Among the major capital sources, all but CMBS come in below 1%, according to MBA figures.

“Growth in property incomes and property values, coupled with low interest rates, have facilitated financing,” helping to keep delinquencies “at or near record lows” for most capital sources, says Jamie Woodwell, VP of commercial real estate research at MBA. “As we near the end of the second quarter, the industry has largely worked through the so-called 'wave of maturities'.”

Each capital source uses a different yardstick to measure delinquency rates, and MBA does not aim to compare apples to oranges, instead presenting the rates as each source presents them. Nor are construction and development loans included in the totals. Life insurers claim the lowest rate of commercial and multifamily mortgage delinquencies of 60 days or more at 0.02% for Q1, a decline of 0.02 percentage points from Q4 2016.

Not far behind are the GSEs, both of which also measure late-pays by the standard of 60-plus days in arrears. Fannie Mae's delinquency rate was unchanged from Q4 at 0.05%, while Freddie Mac's rate of 0.03% was also unchanged.

Banks and thrifts, which use a standard of 90 days delinquent or in non-accrual, posted a Q1 late-pay rate of 0.56%, off 0.04 percentage points from the previous quarter. CMBS, which represents the highest delinquency rate among the capital sources reported by MBA but also posted the biggest decline, ended Q1 at 4.45% of loans being 30 days' delinquent or in REO, a decrease of 0.08 percentage points from the previous quarter.

In general, the trend in commercial/multifamily mortgage delinquencies over the past 14 quarters has been downward, although there have been fluctuations. Life company delinquencies briefly shot up as high as 0.11% in Q2 '16, while CMBS delinquencies fell steadily from Q4 2013 until Q2 of last year, when they began to climb again. Q1's quarterly decline decline represents the first in a year for securitized commercial mortgages.

Instant Insights /

MBA: Delinquencies 'At or Near Record Lows'

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