Commercial/multifamily mortgage debt outstanding decreased by 0.5% in the fourth quarter of 2010 to $2.4 trillion, according to the Mortgage Bankers Association (MBA) in its quarterly analysis of Federal Reserve Board Flow of Funds data. On a year-over-year basis, mortgage debt outstanding at the end of 2010 fell by $67 billion from the level recorded at the end of 2009 – a decline of 2.7%.
The MBA states that the $2.4 trillion in commercial/multifamily mortgage debt outstanding was $12 billion lower than the third quarter. Multifamily mortgage debt outstanding rose to $798 billion – an increase of $3 billion, or 0.3%, from the third quarter.
Commercial banks continue to hold the largest share of commercial/multifamily mortgages: $802 billion, or 34%, of the total. Commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset-backed securities (ABS) are next, holding $621 billion, or 26%. Agency and government-sponsored enterprise portfolios and mortgage-backed securities hold $325 billion, or 14%, and life insurance companies hold $299 billion, or 13%.
‘The change in the balance of commercial and multifamily mortgage debt outstanding was driven by a decline in the amount of CMBS loans outstanding,’ says MBA Vice President of Commercial Real Estate Research Jamie Woodwell. ‘The $50 billion of CMBS loans that were paid off, paid down or were resolved during the year represented 75 percent of the total decline. Strong originations by the Federal Housing Administration, Fannie Mae and Freddie Mac led to an increase in the level of multifamily mortgages outstanding.’
SOURCE: Mortgage Bankers Association
