Delinquency on securitized commercial real estate loans jumped to the highest level in nearly two years. But CRE loan delinquency at banks was the lowest it’s been since at least 2007.
Delinquency of at least 30 days on loans that are included in commercial mortgage-backed securities ended the first half of this year at 4.84 percent — the highest rate since the third-quarter 2015.
The rate ascended 39 basis points versus the end of the first quarter. Compared to the same three-month period last year, CMBS delinquency has soared by 80 BPS.
Those findings were reported by the
Mortgage Bankers Association in its Commercial/Multifamily Mortgage Delinquency Rates for Major Investor Groups | Q2 2017.
MBA Vice President of Commercial Real Estate Research Jamie Woodwell explained that CMBS loans were the outlier in an otherwise rosy report.
Woodwell blamed a slower decline in the balance of delinquent CMBS loans than in overall loans for elevated rates but said, “We expect that situation to reverse in coming quarters.”
Previous reports from other sources covered by Mortgage Daily indicate that CMBS delinquency was expected to rise as CMBS loans originated in 2006 and 2007 reached their maturity dates and defaulted.
More recently, data from Trepp LLC indicate that
30-day CMBS delinquency fell 31 BPS from the end of June 2017 to the end of August.
In MBA’s report, 60-day delinquency on CRE loans owned by life insurance companies climbed 2 BPS to 0.04 percent as of June 30, 2017. But the rate retreated 7 BPS from mid-2016.
Sixty-day multifamily delinquency at Fannie Mae dipped to 0.04 percent from 0.05 percent at the end of the first quarter and 0.07 percent
at the same point last year. The Washington-based firm reported that multifamily delinquency concluded July 2017 at 0.04 percent.
At Fannie’s secondary rival, Freddie Mac, 60-day multifamily delinquency fell to 0.01 percent from 0.03 percent the prior month and 0.02 percent a year prior. But the McLean, Virginia-based firm reported Tuesday that its multifamily rate has
worsened to 0.03 percent as of Aug. 31, 2017.
At banks and thrifts, commercial mortgage delinquency of at least 90 days was 0.54 percent at the end of June. That was the lowest rate since at least 2007 based on quarterly MBA data maintained by Mortgage Daily and quite possibly since 2005 based on year-end data.
The bank CRE delinquency rate was a 2-basis-point improvement from the end of March and 12 BPS better than at the midpoint of last year.
