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Commercial, Multifamily Mortgage Debt Drops Slightly

Commercial/multifamily mortgage debt outstanding totals $2.37 trillion as of the end of the first quarter, according to recent data from the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

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This is down 0.4 percent or $10.4 billion from the first quarter. However, while commercial and multifamily debt decreased, multifamily debt alone increased by $5.4 billion.

""CMBS loans paid-off, paid-down and were liquidated at a far faster pace than new CMBS loans were originated during the quarter,"" said ""Jamie Woodwell"":http://www.mortgagebankers.org/Jamiewoodwellbio.htm, VP of commercial real estate research at MBA.

Multifamily debt outstanding now totals $826 billion after sustaining a 0.7 percent increase over the second quarter. While multifamily debt grew among several categories of debt holders, the largest growth was seen among GSEs, agencies, and mortgage-backed securities (MBS). This group increased its holdings by $7.1 billion.

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Commercial banks and life insurance companies also increased their multifamily mortgage debt holdings over the second quarter of this year, by $3.6 billion and $576 million, respectively.

At the same time, commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs), and other asset-backed securities (ABS) reduced their multifamily debt by $4.8 billion.

Among multifamily debt, the largest share is currently held by government agencies, including Fannie and Freddie, and mortgage-backed securities. Together, they hold 44 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô $360 billion ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô in multifamily mortgage debt.

The second-largest category of multifamily mortgage debt holders is banks and thrifts, which account for 27 percent of the total.

Another 10 percent is held by commercial mortgage-backed securities, collateralized debt obligations, and other asset-backed securities.

When looking at commercial and multifamily debt combined, the MBA reports commercial banks hold 34 percent, the largest share of any one category. That's $815 billion of the total $2.37 trillion.

CMBS, CDO, and ABS decreased their amount of commercial and multifamily debt by $19.8 billion, the greatest amount of any category of commercial and multifamily debt holders over the second quarter.

Finance companies and GSEs, agencies, and MBS also shed commercial/multifamily debt over the quarter. The amount of debt held by finance companies dripped $5.1 billion, while agencies, GSEs and MBS shed $7.1 billion in debt.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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