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Commercial Mortgage Delinquency Rates Remain Low

Commercial and multifamily mortgage delinquency rates stayed low in the first quarter of 2016, according to the Mortgage Bankers Association Commercial/Multifamily Delinquency Report.

This analysis looks at commercial and multifamily delinquency rates for commercial banks and thrifts, life insurance companies, Freddie Mac, Fannie Mae and commercial mortgage-backed securities (CMBS). Together, these five groups hold more than 80% of commercial and multifamily mortgage debt outstanding.

“Strong fundamentals and strong property prices, as well as still low interest rates, continue to support the performance of commercial and multifamily mortgages,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “A record decline in the volume of CMBS loans in foreclosure and REO brought a record decline in the delinquency rate for loans held in CMBS. At the same time, delinquency rates remain extremely low for commercial and multifamily mortgages held by life insurance companies, Freddie Mac, Fannie Mae and banks and thrifts.”

With delinquency rates continuing to decline, commercial mortgage lenders in every niche are more likely to take on new borrowers while the industry continues to remain strong. While the five largest investor groups are performing well, some borrowers don’t qualify for those types of loans. This is where nonconforming commercial mortgage lenders come into play.

Many borrower have had credit issues in the past, are seeking a small-balance commercial mortgage or need to obtain commercial financing too quickly for these groups to provide, disqualifying them from traditional financing. Nonconforming commercial lenders are a simple, efficient option for these borrowers, as they’ll take a common-sense approach to underwriting, as well as the time to understand your borrower’s story.

Once you’ve chosen an experienced small-balance commercial mortgage lender, all you need to do is submit a basic commercial mortgage application, credit report and summary of the deal. These loans are often right in your own backyard. Widening your product offerings to include small-balance commercial loans is a great way to close more loans and earn additional income.

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