Commercial Mortgage Delinquency Rates Are Miniscule

Make no mistake; there are plenty of reasons to be plenty gloomy.
But did you know that commercial mortgage delinquency rates are at the low end of their historic range? Or put in simpler terms; commercial mortgage loans are doing fine.

For example, according to recent research by the Mortgage Bankers Association, of the $1,200,000,000 ($1.2 Trillion) dollars of outstanding commercial mortgage debt held by banks and thrifts, less than 1.5% is delinquent by 90 days or more.
Now 1.5% of $1.2T is not chicken feed, in fact it’s almost $20B. But on a percentage basis, commercial and multi-family loans are holding up nicely. Life insurance companies along with mega lenders Fannie & Freddie are also faring very well in the commercial arena. All are reporting a delinquency rate of well under 1%.

If things get much worse before they get much better, these low delinquency rates won’t stay low. But it the opposite happens and thing start improving, commercial mortgages may (just may) end up dodging the cannon ball.

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One Response to “Commercial Mortgage Delinquency Rates Are Miniscule”

  1. Fitch Says CMBS Defaults Could Double but Affirms WaMu’s Commercial Mortgage Securities Trust at AAA « Commercial Mortgage Loan Blog Says:

    […] (CMBS) defaults could double in 2009. That sounds bad, and if it happens it is not good. But as I posted in this space recently commercial mortgage defaults are relatively minuscule and Fitch is simply saying that CMBS defaults […]

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