Delinquency rates in some sectors are back down to their pre-pandemic levels
Commercial and multifamily mortgage delinquencies remained low in the fourth quarter of 2021, with delinquency rates down or flat for every major investor group.
Four of the five largest investor groups posted declines in delinquency rates at the end of Q4, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report.
Based on the unpaid principal balance (UPB) of loans, delinquency rates for Fannie Mae loans held steady at 0.42%, while Freddie Mac delinquencies decreased 0.04% quarter over quarter to 0.08%. Commercial banks and thrifts saw a 0.10% drop to 0.59% in the fourth quarter, commercial mortgage-backed securities (CMBS) delinquencies were down 0.84% to 4.02%, and life company portfolios stayed unchanged at 0.04%.
“Delinquencies for some sectors appear to remain elevated for one of two reasons,” said Jamie Woodwell, vice president of commercial real estate research at MBA. “For some, lenders and servicers continue to work-out loans that were hard hit by the pandemic. For others, the method of reporting may classify forborne or other loans as delinquent, even when they are back on track. Delinquency rates are back down to at or near their pre-pandemic levels in the other sectors.”
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MBA’s quarterly analysis incorporates the measures used by each individual investor group to track the performance of their loans. MBA noted that delinquency rates are not comparable from one investor group to another because each group tracks delinquencies in its own way.
