The level of commercial/multifamily mortgage debt outstanding decreased in the first quarter, to $3.31 trillion, according to the Mortgage Bankers Association’s (MBA) analysis of the Federal Reserve Board Flow of Funds data.
Declines were driven by drops in commercial and multifamily mortgages held in CMBS and construction loans held by banks and thrifts.
The $3.31 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was a decrease of $31 billion or 0.9 percent from the fourth quarter of 2009. Multifamily mortgage debt outstanding rose to $852 billion, an increase of $3 billion or 0.4 percent from the fourth quarter of 2009.
“Low levels of commercial mortgage borrowing mean that property investors are paying off and paying down more in mortgages than they are taking out,” said Jamie Woodwell MBA’s Vice President of Commercial Real Estate Research. “The balance of construction loans at banks, and commercial and multifamily mortgages held in CMBS and by life insurance companies, saw the largest declines. The balance of multifamily mortgages backed by Fannie Mae, Freddie Mac and FHA saw the largest increase.”
The Federal Reserve Flow of Funds data summarizes the holding of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (included under Life Insurance Companies in this data) and in CMBS, collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note.
Thursday, September 2, 2010
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Hi,
ReplyDeleteDeclines in commercial mortgages held in commercial mortgage-backed securities drove the decrease, along with construction loans held by banks and thrifts. The commercial real estate finance market is a big market. There has been a full scale feeding frenzy for portfolios of seasoned loans. Thanks a lot...
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