We’ve got some news on the loan delinquency front, and it’s a bit of a mixed bag.
Let’s break it down: Delinquency rates for multifamily commercial mortgage-backed securities (CMBS) loans climbed to 1.70% in May. That means a slightly higher percentage of borrowers are falling behind on their payments. There were also $245 million in newly delinquent loans added to the books that month.
But here’s the silver lining: The overall delinquency rate for commercial real estate actually decreased in May. Additionally, a significant number of multifamily loans were resolved during that same period. This suggests that while some delinquencies are popping up, many are also being addressed.
Another data point to watch: the servicing rate. This metric tracks the number of loans that have been transferred to special servicing, which typically happens when a borrower defaults. The servicing rate for multifamily loans has been steadily rising since March, reaching 5.43% in May.
The takeaway? There are signs of some stress in the multifamily loan market, but it’s not a cause for panic. Delinquency rates are still relatively low, and many troubled loans are being resolved. However, the rising servicing rate is a trend worth keeping an eye on.
Aparti Fi is here to keep you informed! We’ll continue to monitor these trends and provide you with the latest updates.
Stay informed, stay proactive, and manage your risk effectively!