The onset of COVID-19 has put increasing pressure on delinquency rates
Delinquencies for commercial and multifamily mortgages stayed low in the first quarter of 2020, the Mortgage Bankers Association's (MBA) reported Thursday.
But last quarter might be an end of an era for low and steady commercial and multifamily mortgage delinquency rates, said MBA exec Jamie Woodwell.
"This year's first quarter marked the end of a long period of extraordinarily low and stable delinquency rates for commercial and multifamily mortgages," he said. "With the onset of the COVID-19 pandemic and our social and economic responses to it, more recent data from MBA and others show increasing pressure on delinquency rates, particularly for loans backed by hotel and retail properties – where the impacts have been most immediately and dramatically felt."
MBA's report looked 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. Collectively, these groups hold more than 80% of commercial/multifamily mortgage debt outstanding.
Based on the unpaid principal balance of loans, delinquency rates for each group at the end of Q1 2020 were as follows:
- Banks and thrifts (90 or more days delinquent or in non-accrual): 0.51%, up 0.09 percentage points from the fourth quarter of 2019
- Life company portfolios (60 or more days delinquent): 0.04%, unchanged from the fourth quarter
- Fannie Mae (60 or more days delinquent): 0.05%, up 0.01 percentage points from the fourth quarter
- Freddie Mac (60 or more days delinquent): 0.08%, unchanged from the fourth quarter
- CMBS (30 or more days delinquent or in REO): 1.79%, down 0.28 percentage points from the fourth quarter
