Dees Stribling, Contributing Editor
Washington, D.C.–According to a Mortgage Bankers Association analysis of Federal Reserve Board Flow of Funds data released over the weekend, multifamily mortgage debt outstanding dropped $11 billion, a 1 percent decrease, between the third quarter and fourth quarter 2009.
Commercial banks saw the largest dollar-term decline of their holdings of multifamily mortgage debt, a decrease of $7 billion, or 3 percent. Savings institutions decreased their holdings of multifamily mortgage debt by $4 billion, or 6 percent. CMBS, CDO, and other asset-backed securities issues decreased by $2 billion, or 2 percent. By contrast, agency- and GSE-backed mortgage pools saw the biggest increase in their holdings of multifamily mortgage debt in dollar terms — $3 billion, or 2 percent.
In percentage terms, nonfinancial corporate businesses recorded the largest decrease in their holdings of multifamily mortgages between 3Q09 and 4Q09, a ratcheting down of 51 percent. Private pension funds saw the biggest percentage increase, by 7 percent.
The GSEs and Ginnie Mae hold the largest share of multifamily mortgages, with $198 billion in mortgage pools and $165 billion in their own portfolios; all together these totals equal 40 percent of the entire multifamily debt outstanding. Next in size are commercial banks with $210 billion, or 23 percent of the total outstanding mortgages.
CMBS, CDO and other ABS issuers hold $108 billion of multifamily mortgages, or 12 percent of the total, while state and local governments have $65 billion, or 7 percent of the total. Finally, savings institutions hold $60 billion, or 7 percent of the total in multifamily mortgages, and life insurance companies have $50 billion, or 6 percent of the total.
The multifamily mortgage numbers exist within a larger universe of commercial/multifamily mortgage debt outstanding, which according to MBA decreased by 1.7 percent in the fourth quarter 2009, to $3.4 trillion. “Payoffs and pay-downs of outstanding mortgages are exceeding new originations,” said Jamie Woodwell, MBA’s vice president of commercial real estate research, in a statement. “Driving the decline was the CMBS market, with essentially no new mortgages coming in, and banks and thrifts, with declines in their construction-related holdings.”