3Q11 Sees CRE Debt Decreasing $22B


The drop over 3Q11 of commercial and multifamily loans is a credit positive for CMBS, according to Standard Poor’s in a note released Friday.

The outstanding balance of commercial and multifamily mortgages dipped $22 billion to $3.09 trillion in the third quarter, SP said, citing the Federal Reserve flow-of-funds data.

This, analysts said, is “a positive for the credit of currently originated loans in CMBS in our view.”

Historically, they stated, there is a strong and positive correlation between loan losses and the CRE debt to GDP ratio, which is a variable in SP’s CMBS Leading Indicators (CLI) Index.

The ratio between CRE debt/GDP dipped 0.4% to 20.3% over the quarter. It has also decreased from the peak of almost 25% in 2008.

The rating agency said that since year-end 2010, life insurance firms have added slightly to exposure. Meanwhile, banks and CMBS have declined.

Daily Briefing | Friday, December 9, 2011

  • Fannie Demands Immediate Notification on MI Rescissions

    Fannie Mae recently told its seller/servicers that all mortgage insurance rescissions, cancellations and claim denials tied to loans it bought must be reported to the agency immediately.

  • Another Increase in Market Share for Loan Brokers

    Perhaps the future for loan brokers isn’t so bleak after all. Wholesale lenders table funded almost $33 billion of loans in the third quarter, giving the channel a 9.2% market share, according to new figures compiled by National Mortgage News and the Quarterly Data Report.

  • KBW: Treasury Can’t Stop Mortgage Rates from Rising in 2012

    Even with the housing market stabilizing and a settlement between megaservicers and state AGs on the horizon, the mortgage industry shouldn’t expect an increase in originations next year, according to a new forecast from Keefe, Bruyette Woods.

  • Arch Bay Tests Use of Borrower Rewards

    An industry hedge fund that selectively trades distressed mortgage assets is testing the use of borrower rewards for timely payment, with the aim of driving better performance, refinancing or modifications.

  • Warehouse Commitments at MetLife Bank Top $900 Million

    Although insurance giant MetLife Inc. is contemplating bids for its banking and mortgage divisions, the company’s warehouse lending unit is nearing the $1 billion mark in terms of commitments.

  • Former Production Chief at Union Launches Consulting Firm

    Craig Cole, a former mortgage production chief who recently retired from Union Bank, San Francisco, has launched a new consulting firm to advise clients on their jumbo lending and execution strategies.

  • Friday Deadline for MISMO Leadership Nominations

    The deadline to nominate industry professionals to serve on MISMO’s residential governance committee is today.

  • Isakson Bill Would Liquidate Fannie and Freddie, Create New Agency

    The federal government should create an entirely new secondary market agency for “high quality” private mortgages that would replace Fannie Mae and Freddie Mac, according to Sen. Johnny Isakson, R-Ga.

  • In War Over CFPB, Democrats Jockey for Political Advantage

    Just seven months ago, Democrats appeared to be boxed in, unable to confirm a leader to the Consumer Financial Protection Bureau without agreeing to demands from Senate Republicans to overhaul the agency’s structure.

Leave a Reply