Commercial Mortgage Delinquencies Increase in Q2

On Tuesday, the Mortgage Bankers Association (MBA) reported that commercial mortgage delinquencies increased in Q2, according to the latest data from its Commercial Delinquency Report.

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of Q2 were as follows:

• Banks and thrifts (90 or more days delinquent or in non-accrual): 1.15%, an increase of 0.12 percentage points from Q1.
• Life company portfolios (60 or more days delinquent): 0.43%, a decrease of 0.09 percentage points from Q1.
• Fannie Mae (60 or more days delinquent): 0.44%, unchanged from Q1.
• Freddie Mac (60 or more days delinquent): 0.38%, an increase of 0.04 percentage points from Q1.
• CMBS (30 or more days delinquent or in REO): 4.82%, an increase of 0.47 percentage points from Q1.

Adding background and analysis to the report, MBA Head of Commercial Real Estate Research Jamie Woodwell said:

“The delinquency rate for loans backed by commercial real estate increased again in the second quarter. Delinquency rates increased for bank loans and Freddie Mac loans, as well as those held in CMBS. Delinquency rates decreased for loans held by life companies and were unchanged for Fannie Mae.

The greatest focus continues to be on office loans, which make up about $740 billion of the $4.7 trillion of commercial mortgage debt outstanding. The CRE market is large and diverse, with significant differences by property type and subtype, market and submarket, borrower, lender, vintage, and more. All of those differences come into play in terms of how an individual loan may perform.”