MF Mortgage Debt Outstanding Grows 1.7 percent in One Quarter

By Anuradha Kher, Online News Editor Washington, D.C.–Multifamily mortgage debt outstanding in the third quarter grew to $890 billion, an increase of $15.2 billion or 1.7 percent from second quarter, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data.In dollar terms, commercial banks saw the largest increase in their holdings of multifamily mortgage debt, an increase of $34 billion, or 19.4 percent. Government Sponsored Enterprises increased their holdings of multifamily mortgage debt by $12 billion, or 6.8 percent. Agency- and GSE-backed mortgage pools increased by $3 billion, or 1.8 percent and savings institutions saw the biggest drop in their holdings of multifamily mortgage debt by $32 billion, or -32.7 percent.In percentage terms, commercial banks recorded the largest increase in their holdings of multifamily mortgages at 19.4 percent. Savings institutions saw the largest drop of -32.7 percent”Uncertainty surrounding the weakening economy, coupled with the continuing pressures of the credit crunch, led to a slight pullback among investors in multifamily mortgages in the third quarter,” says Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “The government-sponsored enterprises and other finance companies have taken advantage of the limited competition to increase their holdings, but the numbers show banks and thrifts beginning to pull back on their holdings, life insurance companies slowing the growth of their portfolios, and the CMBS (commercial mortgage backed securities) market continuing to pay-down its holdings with few, if any, acquisitions,” he says.The GSEs and Ginnie Mae now hold the largest share of multifamily mortgages, with $149 billion in federally related mortgage pools and $180 billion in their own portfolios or 37 percent of the total multifamily debt outstanding. They are followed by commercial banks with $210 billion, or 24 percent of the total. CMBS, CDO and other ABS issuers hold $118 billion, or 13 percent of the total; savings institutions with $65 billion, or 7 percent of the total; state and local governments with $70 billion, or 8 percent of the total; and life insurance companies with $50 billion, or 6 percent of the total.