The Real Deal Miami

Commercial and multi-family loans show signs of strength

March 09, 2010 12:00PM

While speculation over an impending commercial crisis has abounded, Mortgage Bankers Association data released today shows that commercial and multi-family mortgages nationwide had the lowest charge-off rate of any type of bank- and thrift-issued loan in the fourth quarter of 2009. This is an ongoing trend for commercial and multi-family loans, which also shows the low charge-off rates during the same quarter a year earlier. Even more encouraging, commercial and multi-family mortgages had average 30-plus-day delinquency rates of 5.06 percent and 5.64 percent, respectively, lower than the average delinquency rate for all loans and leases held, which hit 7.3 percent in the fourth quarter. But not all types of loans fared so well — construction loans, which saw the highest delinquency rate, hit 18. 56 percent, while single-family mortgages had an average rate of 12.49 percent. Still, the performance of commercial and multi-family mortgages may be cause for cautious optimism, the report says. “Like other parts of the economy, the performance of commercial and multi-family mortgages has been negatively impacted by job losses, consumer restraint and manufacturing declines,” the report says. “The relatively stable performance and low charge-offs of commercial mortgages through the recent recession, however, have helped, rather than hurt, the stability of banks.” TRD