US Commercial Mortgage Delinquency Rates Decline in Q3

According to the latest Mortgage Bankers Association (MBA) Commercial Real Estate Finance (CREF) Loan Performance Survey, delinquency rates for mortgages backed by commercial properties decreased during Q3 compared with Q2.

MBA provided the following details regarding the balance of commercial mortgages that were not current in Q3:

• The share of loans that were delinquent increased for multifamily and health care properties and decreased for office, retail, industrial, and lodging properties.
• Among capital sources, CMBS loan delinquency rates saw the highest levels.
• 5.66% of CMBS loan balances were 30 days or more delinquent, up from 5.14% at the end of the prior quarter.
• 1.45% of life company loan balances were delinquent, down from 1.40%.
• 0.64% of GSE loan balances were delinquent, roughly unchanged from 0.61%.
• 0.79% of FHA multifamily and health care loan balances were delinquent, down from 1.04%.

MBA Associate Vice President of Commercial Real Estate Research Judie Ricks said:

“After significant increases in the second quarter, delinquency rates declined in the third quarter. Compared to the first quarter, third-quarter delinquency rates were up, driven by increases in later stage delinquencies and Foreclosure/REO properties. It is worth watching this portion of the market the rest of the year amidst broader economic uncertainty.”