Commercial/Multifamily Mortgage Originations Off 63 Percent in Second Quarter

August 20, 2008 No Comments »


Commercial and multifamily mortgage origination volume fell two percent from the first quarter and 63 percent year-over-year in the second quarter, the Mortgage Bankers Association reported today.

An annual decrease was seen with most property types and investor groups, although GSE activity managed to hit a record high.

“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.”

Woodwell credited the slowdown in originations to both a decrease in available capital and demand for new mortgages related to the ongoing mortgage crisis.

The year-over-year decline included a 65 percent fall for office property loans, a 63 percent decrease for retail properties, a 42 percent decline in multifamily property loans, and a 66 percent increase in health care loans.

Loans for hotel properties slid 87 percent and industrial property originations fell 57 percent.

Among investor types, conduits for CMBS faired the worst, plummeting by 98 percent compared to the second quarter of 2007, while loans for commercial bank portfolios fell 29 percent and loans for life insurance companies slid 27 percent.

Bucking the trend were Fannie and Freddie, whose dollar volume rose 66 percent as originations during the March to June period were the highest ever recorded.

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