While there was little change in performance on commercial real estate loans owned by life insurers, securitized CRE loan delinquency plunged. The rates were mixed for loans backed by the government-sponsored enterprises.
On loans that are included in commercial mortgage-backed securities, delinquency of at least 30 days, including real estate owned, closed out last year at 4.08 percent.
That turned out to be a 52-basis-point tumble from the end of the third quarter and the lowest rate since the second-quarter 2016, when the it came in at 4.04 percent.
In the final quarter of 2016, the CMBS delinquency rate was 4.53 percent.
Those statistics were presented as part of the Commercial/Multifamily Mortgage Delinquency Rates for Major Investor Groups | Q4 2017 from the Mortgage Bankers Association.
Data reported by Trepp LLC indicate that as of Feb. 28 of this year, 30-day CMBS delinquency has fallen another 38 BPS.
Behind the improvement in CMBS performance were commercial mortgages securitized in 2006 and 2007 that matured in 2016 and 2017. This “wall of maturities” has now passed, and the pre-crisis, looser underwriting on those loans no longer presents a major threat.
MBA reported that 60-day delinquency on CRE loans owned by life insurance companies was 0.03 percent, up a basis from Sept. 30 and down a basis point from year-end 2016.
Sixty-day delinquency on Fannie Mae multifamily loans was 0.11 percent as of Dec. 31, 2017, surging 8 BPS from three months earlier and 6 BPS worse than a year earlier.
Washington-based Fannie has since reported that its multifamily delinquency remained at 0.11 percent as of Jan. 31, 2018.
Rival Freddie Mac’s 60-day multifamily delinquency was 0.02 percent, no different than as of Sept. 30, 2017, but down a basis point from Dec. 31, 2016.
A recent report from McLean, Virginia-based Freddie said multifamily delinquency was unchanged in January.
MBA’s report had 90-day CRE loan delinquency at banks and thrifts finishing 2017 at 0.51 percent, dipping 2 BPS from
three months prior and 9 BPS less than a year prior.
“Commercial and multifamily mortgages ended 2017 continuing to perform extraordinarily well,”, MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in an accompanying announcement. “The market tailwinds of strong fundamentals, increasing property values and ready access to mortgage and other credit all put downward pressure on delinquency rates.”
