C/MF Mortgage Debt Outstanding Increases for Fourth Straight Quarter

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* Commercial/multifamily (C/MF) mortgage debt outstanding increased by $6.6 billion (0.3 percent) in the third quarter of 2012, as three of the four major investor groups increased their holdings, according to the Mortgage Bankers Association (MBA).

The MBA Commercial Real Estate/Multifamily Finance Mortgage Debt Outstanding Q3 2012 report said the $2.38 trillion in outstanding commercial/multifamily mortgage debt rose by $6.6 billion from the second quarter. Multifamily mortgage debt outstanding rose to $825 billion, an increase of $12.1 billion or 1.5 percent from the second quarter.

"The overall amount of commercial and multifamily mortgage debt continues to grow," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "Fannie Mae, Freddie Mac, FHA [Federal Housing Administration], life insurance companies and banks are all increasing their holdings and/or guarantees of commercial and multifamily mortgages. And for the fourth quarter in a row, the net increase by these and other investor groups has outpaced a decline in the balance of commercial and multifamily mortgages held in commercial mortgage-backed securities [CMBS]."

The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under the category of life insurance companies) and in CMBS, collateralized debt obligations (CD0s) and other asset-backed securities (ABS) for which the security issuers and trustees hold the note (and which appear in the data under the category of CMBS, CDO and other ABS issues).

MBA recently improved its reporting of commercial and multifamily mortgage debt outstanding. The new reporting excludes two categories of loans that had formerly been included: 1) loans for acquisition, development and construction, and 2) loans collateralized by owner-occupied commercial properties. …