Delinquency Rates Drop for Banks, Rise for CMBS in First Quarter

While mortgage delinquency rates rose for commercial mortgage backed securities (CMBS) in first-quarter 2012, they fell for banks, according to the ""Mortgage Bankers Association's"":http://www.mbaa.org/default.htm (MBA) ""Commercial/Multifamily Deliquency Report"":http://www.mortgagebankers.org/files/Research/CommercialNDR/1Q12CommercialNDR.pdf.

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Tuesday's report showed that during the first quarter of 2012, the 60+ day delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios decreased 0.03 percentage points to 0.14 percent. The 60+ day rate for multifamily loans held or insured by Fannie Mae also decreased, falling 0.22 percentage points to 0.37 percent. The 90+ day delinquency rate for loans held by FDIC-insured banks and thrifts dropped 0.13 percentage points to 3.44 percent.

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The delinquency rate drop for mortgages in life insurance company portfolios brought the rate down to 7.39 percentage points beneath the series high (7.53 percent during the second quarter of 1992). Fannie Mae's Q1 2012 rate was 3.25 percentage points below the series high (3.62 percent, Q4 1991), while the rate for mortgages held by banks and thrifts was 3.14 percentage points lower than the series high (6.58 percent, Q2 1991).

Delinquency rates did not fall across the board, however. The 60+ day rate for Freddie Mac loans increased 0.01 percentage points to 0.23 percent, while the 30+ day rate for loans held in CMBS rose to 8.85 percent, an increase of 0.29 percentage points.

Though Freddie Mac loans saw a slight increase in delinquency rate, it still sat 6.58 percentage points lower than the series high (6.81 percent, Q4 1992). The rate for CMBS loans was 0.17 percentage points below the high (9.02 percent, Q2 2011).

Together, Fannie Mae, Freddie Mac, banks, CMBS, and life insurance companies hold more than 80 percent of commercial/multifamily debt outstanding. Because each investor group tracks delinquencies in its own way, rates are not comparable from one group to another.