Delinquency rates for mortgages backed by commercial and multifamily properties declined during the last three months of 2021, according to the latest CREF loan performance survey conducted by the Mortgage Banks Association (MBA).
“The fourth quarter saw continued improvement in the performance of commercial and multifamily mortgages, particularly among the types of real estate hardest hit by the economic downturn,” said Jamie Woodwill, vice president of commercial real estate research at the MBA. “The share of outstanding balances in arrears has declined for both residential and retail properties, as landlords, lenders and service workers continue to work through distressed deals. The share of loan balances newly delinquent was the lowest since the start of the pandemic.”
Key findings from the CREF MBA Loan Performance Survey for December 2021:
The balance of non-current commercial and multifamily mortgages decreased slightly in December 2021.
- 0% of outstanding loan balances were current, up from 96.7% at the end of the third quarter of 2021.
- 9% are more than 90 days past due or in REO, down from 2.2% three months ago.
- 2% were 60-90 days past due, unchanged from the previous three months.
- 3% were 30-60 days past due, unchanged from the previous three months.
- 7% were less than 30 days past due, down from 0.8% from three months prior.
Loans backed by housing and retail property continue to see the biggest pressure, but they also saw improvement during the fourth quarter of 2021.
- 5% of the home loan balance was non-performing, down from 14.0% at the end of the third quarter of 2021.
- And 6% of the retail loan balances were in arrears, down from 8.2% three months ago.
- 1% of industrial property loan balances were non-current, up from 1.8% three months ago.
- 8% of office real estate loan balances were uncurrent, unchanged from what they were three months ago.
- 4% of multifamily balances were uncirculated, up from 1.3% three months ago.
Due to the concentration of hotel and retail loans, delinquency rates for CMBS loans are higher than other sources of capital, but they also improved during the last three months of 2021.
- 7% of CMBS loan balances were non-current, down from 7.2% in the third quarter of last year.
- Non-current rates for other sources of capital have been more moderate.
- 2% of multifamily FHA and Medicare loan balances were uncirculated, up from 2.0% three months ago.
- 6% of corporate life loan balances were uncirculated, up from 1.2% three months ago.
- 6% of GSE loan balances were uncurrent, unchanged from what they were three months ago.
For additional information, visit the MBA website: www.mba.org.