|With its acquisition of Wachovia Corp., not only has Wells Fargo & Co. become the biggest residential originator -- but it now ranks as the biggest commercial mortgage servicer. Commercial mortgages held by banks appear to be performing worse than other types.
Wachovia Securities serviced 91,591 commercial mortgages for $412.9 billion as of Dec. 31, the Mortgage Bankers Association reported today. The portfolio makes Wachovia -- which was acquired by Wells on Dec. 31 -- the biggest servicer of U.S. commercial mortgages.
The trade group made its announcement from San Diego, where it is holding its annual commercial mortgage conference this week.
Wachovia also ranked No. 1 in MBA's 2007 year-end commercial servicer ranking, when it serviced 731 loans for $407.9 billion, and in the association's mid-year 2008 ranking, when it serviced 76,375 loans for $434.3 billion. Earlier this month, MortgageDaily.com ranked Wells as the biggest residential originator in the country with $230 billion in 2008 originations.
No. 2 this year was PNC Real Estate - Midland Loan Services, which serviced 34,187 commercial mortgages for $310.3 billion as of Dec. 31, MBA reported. Midland serviced 28,017 loans for $273.7 billion as of June 30.
Capmark Finance was next, with a servicing portfolio of 34,252 units for $260.9 billion, then Wells Fargo, which serviced 19,823 loans for $182.6 billion. No. 5 was Bank of America, N.A., which had a portfolio of 10,522 loans for $135.0 billion.
KeyBank Real Estate Capital was No. 6, followed by GEMSA Loan Services, L.P., Prudential Asset Resources and Deutsche Bank. The acquisition of Washington Mutual Bank on Sept. 25 by JPMorgan Chase Bank, N.A., thrust the New York-based banking behemoth into the 10th spot.
Wachovia also was the biggest servicer of commercial mortgages backing commercial mortgage-backed securities, collateralized-debt obligations or asset-backed securities, MBA said. Its portfolio of securitized loans was 19,415 units for $278.4 billion.
PNC-Midland was the No. 2 biggest servicer of securitized loans, followed by Capmark, Wells and BoA.
In addition, Wachovia topped the ranking of servicer for commercial banks and savings institutions, with 30,738 loan for $44.2 billion. JPMorgan was No. 2, followed by Wells, PNC and KeyBank.
With an agency portfolio of 5,505 for $49.6 billion, PNC was the biggest servicer of multifamily loans managed by either Fannie Mae or Freddie Mac. Wachovia was next, then Capmark, Deutsche and Centerline Servicing Inc.
PNC was also the biggest servicer of FHA and Ginnie Mae commercial mortgages, with a portfolio of 1,949 loans for $9.6 billion. Capmark was the second-biggest servicer, followed by Prudential, Wells and Heartland Bank.
GEMSA was the biggest servicer of commercial mortgages for life insurance companies, managing a portfolio of 2,507 loans for $41.1 billion. PNC was No. 2, Prudential was No. 3 and Northwestern Mutual was No. 4. The fifth biggest servicer for life insurers was NorthMarq Capital.
Another recent report from MBA indicated that commercial mortgage originations during the first nine months of 2008 tumbled 57 percent from the same period in 2007. Third-quarter production was off 11 percent from the second quarter and 53 percent lower than a year earlier.
The report indicated commercial mortgage debt outstanding stood at $3.44 trillion on Sept. 30, down $3.3 billion from the second quarter. Commercial banks accounted for 43 percent of commercial mortgages outstanding, while securitized debt represented 22 percent and life insurers held 9 percent.
Outstandings included $799.7 billion in CMBS, down from $821.2 billion on Dec. 31, 2007.
Delinquency of at least 60 days was 0.06 percent on life insurance company loans as of Sept. 30, while delinquency was 0.16 percent at Fannie and 0.01 percent at Freddie. CMBS late payments, reported based on delinquency of at least 30 days, was 0.63 percent.
Delinquency at banks and thrifts, reported based on 90-day delinquency, was 1.38 percent. Given that savings institutions are only reporting 90-day delinquency -- the latest level indicates significantly worse performance at banks than other sectors.