Trepp: CMBS Delinquencies Pass 10 Percent for First Time
Carl Gaines June 6, 2012, 9 a.m.
According to data from the Mortgage Bankers Association, delinquency rates for commercial and multifamily mortgages dropped for banks, life companies and Fannie Mae but went up for CMBS over the first quarter of 2012. It rose 0.29 percent to 8.85 percent for CMBS mortgages 30-plus days delinquent during the quarter.
Meanwhile, in its U.S. CMBS Delinquency Report for May, Trepp found that the percentage of CMBS loans 30-plus days delinquent had hit an all-time high for the month, jumping to 10.04 percent. This marked a three month increase of 0.36 percent.
The CMBS numbers continue to be impacted by the sheer number of those loans—issued at the height of the credit bubble in 2007—that are coming due now. They’re also influenced, as Trepp pointed out in its report, by the uncertainty roiling Europe’s financial markets.
The MBA found that, among entities with commercial mortgages 60 or more days delinquent, life companies came out ahead with a mere 0.14 percent of their loans delinquent for Q1 2012. They were followed by Freddie Mac (0.23 percent) and Fannie Mae (0.37 percent).
“Back in December we predicted that 2012 could be a rocky year for CMBS in terms of delinquency rate,” Trepp said in its report. “At the time, the delinquency rate was hovering at 9.51 percent and had stayed in a fairly tight band for a number of months. We wrote that the market could easily see a spike of 70 basis points in the short term, as five-year loans that were securitized in 2007 began to reach their maturity dates. That prophecy now appears to have come true.”
Trepp did note, however, that the 2007 five-year loans were heavily front-loaded and that by the end of June the number reaching their maturity should dwindle.