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CRE Delinquency Rates at Lowest Levels in 5+ Years

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For most types of investor groups, performance on commercial real estate loans was at its best in at least five years.

Delinquency of at least 30 days on loans included in commercial mortgage-backed securities closed out the third quarter at 5.47 percent.

It was the lowest level for CMBS delinquency since the third-quarter 2009, when the rate was a revised 4.08 percent.

The statistics were outlined in the Mortgage Bankers Association’s Mortgage Delinquency Rates for Major Investor Group Q3 2014.

CMBS delinquency was 37 basis points better than at the end of the second quarter and 138 BPS lower than at the same point in 2013.

The CMBS 30-day rate fell another 6 BPS in October, according to Morningstar Credit Ratings LLC.

A 12-basis-point decline from the second-quarter 2014 left 90-day delinquency on CRE loans owned by banks and thrifts at 1.28 percent — the lowest level since it was a revised 1.22 percent in the second-quarter 2008.

The past-due rate on bank CRE loans was 1.70 percent in the third-quarter 2013.

At life insurance companies, the 60-day rate slipped 3 BPS to 0.05 percent as of Sept. 30, 2014. A 1-basis-point improvement was made compared to one year prior at life insurers.

Sixty-day delinquency on Fannie Mae multifamily loans was 0.09 percent, off from 0.10 percent three months earlier and 9 BPS better than a year earlier.

Fannie reported last month that its multifamily delinquency rate dropped to 0.06 percent in October — a level not seen since August 2007.

Across town at Freddie Mac, 60-day multifamily delinquency was 0.03 percent as of September 2014, a basis point higher than at the end of the second quarter and 2 BPS lower than in the third-quarter 2013.

Freddie reported that its multifamily delinquency remained at 0.03 percent in October.

“Improving property fundamentals and values, as well as a strong finance market, are helping drive delinquency rates down across all investor groups,” MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in a news release.

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