Commercial, Multi-Family Mortgage Delinquencies Remain Low in Q4

Another day, another positive mortgage report.

The Mortgage Bankers Association announced Tuesday that commercial and multifamily mortgage delinquencies remained at or near record-low delinquency rates. This is in line with other data released for January on delinquencies and foreclosure rates.

“Commercial and multifamily mortgages ended the fourth quarter of 2019 much the way they started the year – at or near record low delinquency rates,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “The key drivers – solid property fundamentals, strong property values and low interest rates – continue to support the market.”

MBA’s quarterly analysis examines the commercial/multifamily delinquency rates for commercial banks and thrifts, commercial mortgage-backed securities, life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

The analysis found that the delinquency rates for each group at the end of the fourth quarter of 2019 included:

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.42 percent, a decrease of 0.03 percentage points from the third quarter of 2019;
  • Life company portfolios (60 or more days delinquent): 0.04 percent, an increase of 0.01 from the third quarter;
  • Fannie Mae (60 or more days delinquent): 0.04 percent, a decrease of 0.02 percentage points from the third quarter;
  • Freddie Mac (60 or more days delinquent): 0.08 percent, an increase of 0.04 from the third quarter; and
  • Commercial mortgage-backed seecurities (30 or more days delinquent or in REO): 2.07 percent, a decrease of 0.22 percentage points from the third quarter.

“It is too early to tell if and how concerns tied to the coronavirus and the related global slowdown will affect commercial real estate loan performance, but the corresponding drop in financing costs are providing additional near-term support,” Woodwell said.