Priya Patel
The Mortgage Bankers Association (MBA) has reported an increase in commercial delinquencies during Q3 2023. Delinquency rates increased for the third consecutive quarter due to higher interest rates, changes in some property market fundamentals, and uncertainty about property values. Jamie Woodwell, MBA’s Head of Commercial Real Estate Research, said that the market activity remains muted, which further complicates the situation. MBA’s analysis found that every major capital source saw delinquency rates rise. The analysis incorporates commercial delinquency rates of five of the largest investor groups – commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, and Fannie Mae and Freddie Mac. Together, these groups hold more than 80% of commercial mortgage debt outstanding.
In Q3 2023, delinquency rates for each group at the end of the third quarter were as follows:
– Banks and thrifts (90 or more days delinquent or in non-accrual): 0.85%
– Life company portfolios (60 or more days delinquent): 0.32%
– Fannie Mae (60 or more days delinquent): 0.54%
– Freddie Mac (60 or more days delinquent): 0.24%
– CMBS (30 or more days delinquent or in REO): 4.26%
