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Feb. 14, 2014

Slow Return

(quarterly change in mortgage debt outstanding, $ in thousands)

Sources: MBA, Federal Reserve Board of Governors and FDIC

Sources: MBA, Federal Reserve Board of Governors and FDIC

By Jamie Woodwell

Commercial and multi-family mortgage debt outstanding grew in the third quarter of 2013 by the largest amount since 2008. The level of commercial/multi-family mortgage debt outstanding grew by $25.2 billion in the third quarter, as all four major investor groups increased their holdings. That is a 1 percent increase over the second quarter. Total CMF debt outstanding stood at $2.47 trillion in the third quarter. Multi-family mortgage debt outstanding rose to $887 billion, an increase of $10.8 billion, or 1.2 percent, from second quarter 2013.

Commercial banks continue to hold the largest share of CMF mortgages, with $870 billion, or 35 percent of the total. CMBS, CDO and other ABS issues are the second-largest holders of CMF mortgages, holding $563 billion, or 23 percent of the total. Agency/GSE portfolios and MBS hold $391 billion, or 16 percent of the total, and life insurance companies hold $333 billion, or 14 percent. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues.

The third quarter also marked the largest increase in the outstanding balance of loans in commercial mortgage-backed securities since 2007, and there were increases in the holdings of every major investor group.

—Jamie Woodwell is vice president of commercial/multi- family research for the Mortgage Bankers Association.

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