Commercial RE Delinquencies at Historically Low Levels
A new analysis by the Mortage Bankers Association shows mortgage delinquencies for commercial real estate and multi-family housing were at historically low levels in December, despite the credit problems afflicting the rest of the real estate industry.
The new MBA analysis looks at commercial/multifamily delinquency rates since 1996 and compares year-end rates for the five largest investor-groups: commercial banks and thrifts,commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.
CMBS delinquency rates at year-end 2007, for example, were lower than those at year-end of 9 of the previous 10 years.
Life companies finished 2007 with a delinquency rate lower than at year-end of all 11 of the pervious 11 years. Fannie Mae finished with a rate equal to or lower than 10 of the previous 11 years. Freddie Mac finished with a rate lower than 10 of the previous 11 years. And FDIC-insured banks and thrifts finished the year with a delinquency rate lower than 5 of the previous 11 years.
Still, delinquencies of mortgages held by banks and thrifts were trending upwards, so lenders may not be out of the woods yet.
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