The level of outstanding commercial/multifamily mortgage debt decreased by $10.4 billion, or 0.4%, in the second quarter of 2012, as the balance of loans in CMBS, CDO and other ABS issues continued to decline, reported the Mortgage Bankers Association (MBA).
The $2.37 trillion in outstanding commercial/multifamily mortgage debt was $10.4 billion lower than the first quarter 2012 figure. Multifamily mortgage debt outstanding rose to $826 billion, an increase of $5.4 billion or 0.7% from the first quarter of 2012.
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"CMBS loans paid-off, paid-down and were liquidated at a far faster pace than new CMBS loans were originated during the quarter," said Jamie Woodwell, MBA's vice president of
commercial real estate research. "The drop in CMBS balances more than offset the increases in holdings by Fannie Mae, Freddie Mac and FHA, banks and life insurance companies."
In the second quarter of 2012, CMBS, CDO and other ABS issues saw the largest decrease in dollar terms in their holdings of commercial/multifamily mortgage debt - a decrease of $19.8 billion, or 3.4%. Finance companies decreased their holdings of commercial/multifamily mortgages by $5.1 billion, or 8.4%. Agency and GSE portfolios and MBS saw the largest increase of $7.1 billion, or 2.0%.
In percentage terms, the household sector saw the largest decrease in their holdings of commercial/multifamily mortgages, a decrease of 13.4%. The other insurance companies sector saw their holdings increase 4.1%.
Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $815 billion, or 34% of the total. CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $555 billion, or 23% of the total. Agency/GSE portfolios and MBS hold $360 billion, or 15% of the total, and life insurance companies hold $320 billion, or 14% of the total.
Changes in Multifamily Mortgage Debt Outstanding
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $360 billion, or 44% of the total multifamily debt outstanding. They are followed by banks and thrifts with $225 billion, or 27% of the total. CMBS, CDO and other ABS issues hold $83 billion, or 10% of the total; state and local governments hold $71 billion, or 9% of the total; life insurance companies hold $51 billion, or 6% of the total; and the federal government holds $14 billion, or 2% of the total.
The $5.4 billion increase in multifamily mortgage debt outstanding between the first and second quarter of 2012 represents a 0.7% increase. In dollar terms, agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt, an increase of $7.1 billion, or 2%. Commercial banks increased their holdings of multifamily mortgage debt by $3.6 billion, or 1.6%. Life insurance companies increased by $576 million, or 1.2%. CMBS, CDO, and other ABS issues saw the biggest decline in their holdings of multifamily mortgage debt, by $4.8 billion or 5.4%.
In percentage terms, private pension funds recorded the largest increase in holdings of multifamily mortgages, at 8.6%. CMBS, CDO, and other ABS issues saw the biggest decrease, at 5.4%.
MBA's analysis is based on data from the Federal Reserve Board's Flow of Funds Account of the United States and the Federal Deposit Insurance Corporation's Quarterly Banking Profile. More information on the construction of this data series is contained in Appendix A in the report.
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