Mortgage Delinquencies in Commercial and Multifamily Continue to Grow.

Delinquency rates of mortgages backed by commercial and multifamily properties have broadly improved in recent months, according to two reports released jointly today by the Mortgage Bankers Association (MBA).

The summary of findings come from MBA’s Commercial Real Estate Finance (CREF) Loan Performance Survey for August, and the latest quarterly Commercial/Multifamily Delinquency Report for the second quarter of 2021. The CREF Loan Performance Survey was developed by MBA to better understand the ways pandemic is impacting commercial mortgage loan performance. MBA’s regular quarterly analysis of commercial/multifamily delinquency rates is based on third-party numbers covering each of the major capital sources.

“Delinquency rates for mortgages backed by commercial and multifamily properties have broadly improved in recent months as the U.S. economy continues to heal from the COVID-19 pandemic,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Performance is still property-type dependent, with the properties that saw the most immediate and dramatic impacts from the pandemic – lodging and retail – still experiencing considerably more stress than others but showing improvement. Delinquency rates are down significantly for those property types and remain muted for others.”

Woodwell added, “There should be continued downward pressure on delinquency rates as more later-stage delinquencies are worked through. What happens with early-stage delinquencies will largely be a function of the broader economy.”

Key Findings from MBA’s CREF Loan Performance Survey for August 2021:

Note: The survey includes a range of delinquency measures, but for the purposes of understanding the impacts from the pandemic, any non-current loan is generally treated as delinquent.