Commercial and Multifamily Mortgage Delinquency Rates Continue to Vary by Property Types and Capital Sources

WASHINGTON, D.C. (December 10, 2020) – Commercial and multifamily mortgage performance remains mixed, revealing the various impacts the COVID-19 pandemic has had on different types of commercial real estate, according to two reports released today by the Mortgage Bankers Association (MBA). The summary of findings come from MBA’s November Commercial Real Estate Finance (CREF) Loan Performance Survey and the latest quarterly Commercial/Multifamily Delinquency Report for the third quarter of 2020. The CREF Loan Performance Survey was developed to better understand the ways the 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. “Commercial and multifamily mortgage delinquency rates remain mixed, varying dramatically by property type, and therefore by capital source,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Much of the stress in the market is driven by loans, predominantly for lodging and retail properties, that became delinquent in April and May and have now transitioned to later-stage delinquencies. November did see small increases in newly delinquent retail, lodging and office loans, but at levels far below what was seen at the outset of the pandemic.” Added Woodwell, “Different capital sources calculate delinquency rates in different ways, and those differences can cloud comparisons. Looking to 2021, widespread vaccinations should help the economy and commercial real estate – especially the hard-hit retail and leisure and hospitality sectors – start to recover at a faster pace by mid-summer. Between now and then, much will depend on how long the current surge lasts, and the degree to which it holds back economic activity.” Click to read more at www.mba.org.