Delinquency rates for commercial and multifamily mortgage loans continued to decline in the third quarter of 2014, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

During the third quarter, the 30-plus day delinquency rate for loans held in commercial mortgage-backed securities (CMBS) decreased 0.37 percentage points to 5.47 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Fannie Mae decreased 0.01 percentage points to 0.09 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Freddie Mac increased 0.01 percentage points to 0.03 percent. The 60-plus day delinquency rate for commercial and multifamily mortgages held in life company portfolios decreased 0.03 percentage points to 0.05 percent. The 90-plus day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.12 percentage points to 1.28 percent.

"Commercial and multifamily mortgage loans continue to perform well," Jamie Woodwell, MBA’s vice president of commercial real estate research, said in a statement. "Improving property fundamentals and values, as well as a strong finance market, are helping drive delinquency rates down across all investor groups. The 90-plus day delinquency rate for bank-held commercial and multifamily mortgages fell to 1.28 percent in the third quarter of 2014, a level last seen in early 2008 at the beginning of the credit crisis. The delinquency rate for multifamily loans held by banks has not been this low, 0.5 percent, since 2006."

The third quarter 2014 delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios was 7.48 percentage points lower than the series high (7.53 percent, reached during the second quarter of 1992). The delinquency rate for multifamily loans held by Freddie Mac was 6.78 percentage points lower than the series high (6.81 percent, reached in the fourth quarter of 1992). The delinquency rate for multifamily loans held by Fannie Mae was 3.53 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991). The rate for commercial and multifamily mortgages held by banks and thrifts was 5.3 percentage points lower than the series high (6.58 percent, reached in the second quarter of 1991). The rate for loans held in CMBS was 3.55 percentage points below the series high (9.02 percent, reached in the second quarter of 2011).

The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities, life insurance companies, Fannie Mae, and Freddie Mac.  Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the third quarter were as follows:

• Life company portfolios: 0.05 percent (60 or more days delinquent)
• Freddie Mac: 0.03 percent (60 or more days delinquent)
• Fannie Mae: 0.09 percent (60 or more days delinquent)
• Banks and thrifts: 1.28 percent (90 or more days delinquent or in non-accrual)
• CMBS: 5.47 percent (30 or more days delinquent or in REO)