Mortgage Delinquencies Backed by Commercial and Multifamily Properties Dropped in July

According to the latest Mortgage Bankers Association’s (MBA) monthly CREF Loan Performance Survey, delinquency rates for mortgages backed by commercial and multifamily properties declined in July. The survey was created to help better understand the ways the COVID-19 pandemic is impacting commercial mortgage loan performance. Of the total number of commercial and multifamily mortgages, 95.5% of outstanding loan balances are current, up from 95.2% from a month earlier. 1.1% were less than 30 days delinquent, unchanged from a month earlier. 0.3% were 30-60 days delinquent, down from 0.6% a month earlier. 0.2% were 60-90 days delinquent, unchanged from a month earlier. 2.9%, however, were 90+ days delinquent or in REO, down from 3.0% a month earlier. Of note, loans backed by lodging and retail properties continue to see the greatest stress but did show improvement last month.

In comments prepared for the release of the CREF Survey, Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research said, “Commercial and multifamily mortgage delinquencies declined in July, hitting the lowest point since the onset of the pandemic. Loan performance continues to be very property-type dependent, with lodging loans still the hardest hit but showing strong improvement. Office properties saw a decline in overall delinquencies, but there was an uptick in loans that are newly delinquent. The strength of the economy should continue to support most property types in the coming months.”