| Title: | MBA: Commercial/Multifamily Mortgage Originations Fall in Q2 |
| Source: | MBA |
| Date: | 8/20/2008 |
Washington, DC (August 20, 2008) – Commercial and multifamily mortgage loan originations continued to fall on a year-over-year basis in the second quarter,
according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
Second quarter originations were sixty-three percent lower than during the same period last year. The year-over-year decrease
was seen across most property types and investor groups.
“Commercial/multifamily mortgage originations remained low in second quarter,” said Jamie Woodwell, MBA’s Vice President of
Commercial/Multifamily Real Estate Research. “Fannie Mae and Freddie Mac set a new record high; banks, thrifts and life companies
are back down from their 2006 and 2007 record paces; and originations for the commercial mortgage backed securities (CMBS)
market hit a new record low. The slowdown in originations has come from both a decrease in the supply of capital available
and a decrease in the demand for new mortgages. It is likely volumes will remain muted until buyers, sellers, borrowers,
lenders and their expectations of rates and terms match closely enough for transaction activity to pick back up.”
Decreases in total commercial/multifamily mortgage originations were led by a drop in commercial mortgage-backed security
(CMBS) conduit loans. These numbers show the impact of the recent credit crunch and other market disruptions.
SECOND QUARTER 2008 SIXTY-THREE PERCENT LOWER THAN SECOND QUARTER 2007
The decrease in commercial/multifamily lending activity during the second quarter was driven by decreases in originations
for most property types. When compared to the second quarter of 2007, the overall 63 percent decrease included an 87 percent
decrease in loans for hotel properties, a 65 percent decrease in loans for office properties, a 63 percent decrease in loans
for retail properties, a 57 percent decrease in loans for industrial properties, a 42 percent decrease in multifamily property
loans, and a 66 percent increase in health care loans.
Among investor types, conduits for CMBS saw a significant decrease of 98 percent compared to last year’s second quarter.
There was also a 29 percent decrease in loans for commercial bank portfolios, and a 27 percent decrease in loans for life
insurance companies. The dollar volume of loans for Government Sponsored Enterprises (or GSEs – Fannie Mae and Freddie Mac)
saw an increase of 66 percent. The level of originations for the GSEs was the highest recorded for a March through June period;
while the CMBS market saw the lowest level since the MBA survey began in 2001.
SECOND QUARTER 2008 2 PERCENT LOWER THAN FIRST QUARTER 2008
Second quarter 2008 mortgage originations were 2 percent lower than originations in the first quarter of 2008.
Among investor types, conduits for CMBS saw a decrease in loan volume of 53 percent compared to the first quarter of 2008,
loans for commercial bank portfolios saw an increase in loan volume of 27 percent compared to the first quarter of 2008, life
insurance companies increased by 8 percent during the same time span, and GSEs volume was essentially unchanged from the first
quarter 2008 to second quarter 2008.
Compared to the first quarter of 2008, second quarter originations for industrial properties saw a 23 percent decrease. There
was a 14 percent decrease for multifamily properties, a 7 percent decrease for retail properties, a 90 percent increase for
health care properties, a 33 percent increase for office properties, and a 21 percent increase for hotel properties.
To view the report CLICK HERE. Detailed statistics on the size and scope of the commercial/multifamily origination market are available from these MBA
commercial/multifamily research reports.
• Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation, 2007
• Commercial Real Estate/Multifamily Finance Firms: Annual Origination Volumes, 2007
• MBA Annual Report on Multifamily Lending, 2006
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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry
that employs more than 370,000 people in virtually every community in the country. Headquartered in Washington, D.C., the
association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand
homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and
fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety
of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies,
mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending
field. For additional information, visit MBA's Web site: www.mortgagebankers.org.