U.S. Commercial, Multifamily Mortgage Delinquencies Remain Low in 2017

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According to the Mortgage Bankers Association's latest Commercial/Multifamily Delinquency Report, delinquency rates for commercial and multifamily mortgage loans in the U.S. were flat or decreased in the first quarter of 2017.

"Delinquency rates for commercial and multifamily mortgages remained at or near record lows for most capital sources during the first quarter," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Growth in property incomes and property values, coupled with low interest rates, have facilitated financing. As we near the end of the second quarter, the industry has largely worked through the so-called 'wave of maturities'."

The MBA analysis looks at commercial/multifamily delinquency rates for five of the 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.

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the first quarter were as follows:

• Banks and thrifts (90 or more days delinquent or in non-accrual): 0.56 percent, a decrease of 0.04 percentage points from the fourth quarter of 2016;

• Life company portfolios (60 or more days delinquent): 0.02 percent, a decrease of 0.02 percentage points from the fourth quarter of 2016;

• Fannie Mae (60 or more days delinquent): 0.05 percent, unchanged from the fourth quarter of 2016.

• Freddie Mac (60 or more days delinquent): 0.03 percent, unchanged from third quarter of 2016;

• CMBS (30 or more days delinquent or in REO): 4.45 percent, a decrease of 0.08 percentage points from the fourth quarter of 2016;

• The analysis incorporates the measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.