Late commercial mortgages at their lowest level since the start of the pandemic

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Commercial mortgage delinquency rates continue to improve. The Mortgage Bankers’ Association said that in addition to modest growth in apartment buildings, they fell in May to their lowest level since the start of the COVID-19 pandemic.

The share of commercial and multi-family mortgages was 95.2% on repayments in May, compared with 95.1% in Aprilaccording to the monthly MBA Survey of the Effectiveness of Commercial Real Estate Loans.

However, “hotbeds of increased stress remain in loans secured by residential and retail real estate due to loans at later stages of delinquency and foreclosures or REOs,” Jamie Woodwell, vice president of commercial real estate research, said in a press release. “Quarterly measurements of delinquency rates between the fourth quarter of last year and the first quarter of this year show a decrease in problems in almost all sources of capital.”

In May, the number of serious delinquencies on commercial and multi-family mortgages that are more than 90 days overdue in payments or property ownership dropped to 3.1% from 3.2%.

Only 0.2% were 60–90 days late, compared with 0.3% in April. But in the category of 30-60 days late, there was an increase from 0.4% to 0.5%.

Service providers reported that 1% of their loans were less than 30 days overdue, up from 1.1% in April.

Loans secured by residential and commercial real estate continue to experience severe stress. Fewer home loans were outstanding in May, but this was still a relatively high proportion of 20%; in April 20.2% of these loans were overdue.

The higher share of retail loans was short-lived in May – 9.5% versus 9.3% in April.

Both categories continue to perform much better than last June, when the NPL ratio was 27.3% for housing and 9.3% for retail.

Only 1.8% of apartment buildings missed their May payment, but that’s up from 1.7% in April. This has been the same general range for this type of property since the MBA began this study last year.

Delinquencies on commercial mortgage-backed securities improved to 8.2% in May from 8.5% in April.

However, for mortgage loans insured by the Federal Housing Administration, the level of overdue payments increased by 0.3 percentage points to 2.4%, and for mortgage loans financed by the state – by 0.1 percentage points to 1.2%. The level of delinquency on loans in portfolios of life insurers in May amounted to 2%, unchanged compared to April.

The MBA also released a quarterly delinquency report. Unlike monthly data that comes from a survey of service personnel and reports on loans that were unpaid this month, this report comes from a variety of capital providers and reflects each source’s own metrics.

For CMBS, which considers loans overdue for 30 days or more or in REOs as overdue, the rate fell to 6.3% in the first quarter, down from 7.5% in the fourth quarter. IN first quarter of last yearbefore the pandemic broke out, this type of investor had a delinquency rate of 1.79%, the lowest in more than 10 years.

For bank loans and savings loans with a delay of 90 days or more, the 0.8% delinquency rate in the first quarter was down 3 basis points from the fourth quarter, but increased by 29 basis points year on year.

Fannie Mae, which includes deferral loans that are not current for 60 days or later, had 32 basis points. quarterly decline in late payment up to 0.66%. A year earlier, the rate was only 5 basis points.

Freddie Mac does not include outstanding loans in its report, the rate of delinquencies in the first quarter was 17 basis points, up 1 bp. more than in the fourth quarter and 9 basis points compared to the first quarter of 2020.

The 0.1% overdue rate of more than 60 days among life insurers was 6 basis points lower than in the fourth quarter, but 6 basis points higher than a year ago.



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