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MBA: Commercial, Multifamily Delinquencies Declining

Delinquencies among commercial and multifamily mortgages are down, according to the latest ""report"":http://www.mortgagebankers.org/files/Research/CommercialNDR/3Q12CommercialNDR.pdf from the ""Mortgage Bankers Association (MBA)."":http://www.mbaa.org/default.htm

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Measured separately, the delinquency rates for commercial and multifamily mortgages held by Fannie Mae, Freddie Mac, and life companies are all ""extremely low,"" according to Jamie Woodwell, VP for commercial real estate research at MBA.

In fact, most are at least a few full percentage points below their record highs.

The rate of commercial and multifamily loans 60+ days past due held by Fannie Mae declined 0.01 percentage points over the third quarter, arriving at a delinquency rate of 0.28 percent. This is 3.34 percentage points below the high of 3.62 percent Fannie Mae experienced in the fourth quarter of 1991.

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At Freddie Mac, the rate of multifamily loans 60 or more days delinquent was unchanged at 0.27 percent for the third quarter. Freddie Mac's multifamily delinquency rate is 6.54 percentage points below its high of 6.81 percent recorded in the fourth quarter of 1992.

The rate of loans 90 or more days delinquent held by banks and thrifts declined 0.18 percentage points to 2.93 percent for the quarter. The rate is down 3.65 percentage points from the high of 6.58 percent recorded in the second quarter of 1991.

Woodwell points out, ""The delinquency rate on bank-held loans is at its lowest level since the beginning of 2009.""

The 60+ day delinquency rate for commercial and multifamily loans held by life companies declined 0.03 percentage points over the third quarter to 0.12 percent for the quarter. The current rate is 7.41 percentage points below the high of 7.53 percent experienced in the second quarter of 1992.

Life companies also experienced a decline in the delinquency rate among commercial mortgage-backed securities (CMBS) during the third quarter. The rate of CMBS loans 30 or more days delinquent fell by 0.11 percentage points to 8.86 percent. This is 0.16 percentage points below the high of 9.02 percent recorded in the second quarter of last year.

CMBS delinquencies remain ""elevated,"" according to Woodwell, but are stabilizing.

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