Magazine article Mortgage Banking

MBA: C/MF Mortgage Debt Outstanding Reaches New High in 1Q

Magazine article Mortgage Banking

MBA: C/MF Mortgage Debt Outstanding Reaches New High in 1Q

Article excerpt

Commercial/multifamily (C/MF) mortgage debt outstanding increased by $11.1 billion in the first quarter of 2014, the Mortgage Bankers Association (MBA) announced. Three of four major investor groups increased their holdings. [paragraph] According to the MBA Commercial Real Estate/Multifamily Finance Mortgage Debt Outstanding report for the first quarter, the increases represented an 0.4 percent increase over the fourth quarter. Total commercial/multifamily debt outstanding stood at $2.56 trillion in the first quarter. Multifamily mortgage debt outstanding rose to $913 billion--an increase of $8.7 billion, or 1 percent, from the fourth quarter.

"Commercial and multifamily mortgage debt outstanding continued to expand during the first quarter, hitting another new high," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "Banks led the charge, followed by life insurance companies and REITs [real estate investment trusts], while the CMBS [commercial mortgage-backed securities] market reverted to a net decline in the balance of outstanding mortgages. Mortgage debt backed by apartment properties continued to grow at a faster pace than other property types, particularly on bank balance sheets."

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 MBA's 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 here under the category of CMBS, CDO and other ABS issues).

Commercial banks continue to hold the largest share of commercial/multifamily mortgages at $914 billion, or 36 percent of the total. CMBS, CDO and other ABS issues follow, holding $554 billion, or 22 percent. Agency/government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) hold $391 billion, or 15 percent; and life insurance companies hold $342 billion, or 13 percent. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the "CMBS, CDO and other ABS issues" category. …

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