Magazine article Mortgage Banking

Commercial/multifamily Mortgage Debt Outstanding Up $8.1 Billion in Q1

Magazine article Mortgage Banking

Commercial/multifamily Mortgage Debt Outstanding Up $8.1 Billion in Q1

Article excerpt

Commercial/multifamily mortgage debt outstanding increased by $8.1 billion (0.3 percent) in the first quarter, as three of the four major investor groups increased their holdings, according to the Mortgage Bankers Association (MBA).

MBA's 1st Quarter 2012 Commercial Debt Outstanding Report said the $2.37 trillion in commercial/multifamily mortgage debt outstanding was $8.1 billion higher than the fourth-quarter 2011 figure. Multifamily mortgage debt outstanding rose to $818 billion, an increase of $6.9 billion or o.8 percent from the fourth quarter of 2011.

"The amount of commercial and multifamily mortgage debt outstanding increased during the first quarter as lenders put out more in new loans than [they] paid off or paid down," said Jamie Woodwell, MBA's vice president of commercial real estate research. "Banks, Fannie Mae, Freddie Mac and FHA [Federal Housing Administration] and life insurance companies all increased their holdings of commercial and multifamily mortgages, more than offsetting declines among commercial mortgage-backed securities [CMBS] and other investor groups," said Woodwell.

The analysis summarizes the holdings of loans or, it 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 (CDOs) and other asset-backed securities (ABS) for which the security issuers and trustees hold the note (and which appear in the data under the categories 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: i) loans for acquisition, development and construction and 2) loans collateralized by owner-occupied commercial properties. By excluding these loan types, the analysis more accurately reflects the balance of loans supported by office buildings, retail centers, apartment buildings and other income-producing properties that rely on rents and leases to make their payments.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, at $808 billion or 34 percent. CMBS, CDO and other ABS issues are the second-largest holders with $575 billion or 24 percent. Agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) hold $352 billion or 15 percent; and life insurance companies hold $317 billion, or 13 percent. …

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