Commercial/Multifamily Mortgage Originations Down 80% from Q4 2007 in MBA Survey

SAN DIEGO, CA - - Commercial and multifamily mortgage loan originations dropped in the fourth quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

Fourth quarter originations were 80 percent lower than during the same period last year. The year-over-year decrease was seen across all property types and investor groups.

"Commercial and multifamily mortgage lending slowed to a trickle in the fourth quarter," said Jamie Woodwell, (top right photo) Vice President of Commercial Real Estate Research at the Mortgage Bankers Association.

"Origination levels in the fourth quarter were 80 percent below last year's fourth quarter, and originations for all of 2008 were down approximately 60 percent from 2007 levels. Between the worsening economy and the continued credit crunch, lenders are extremely cautious about lending and borrowers are likely to hold onto the assets and the loans they already have."

Decreases in total commercial/multifamily mortgage originations continued to be led by a drop in commercial mortgage-backed security (CMBS) conduit loans and loans for commercial bank portfolios. These numbers show the impact of the recent credit crunch and other market disruptions.

FOURTH QUARTER 2008 80 PERCENT LOWER THAN FOURTH QUARTER 2007

The decrease in commercial/multifamily lending activity during the fourth quarter was driven by decreases in originations for all property types.

When compared to the fourth quarter of 2007, the overall 80 percent decrease included a 99 percent decrease in loans for hotel properties, an 82 percent decrease in loans for retail properties, a 76 percent decrease in loans for industrial properties, a 72 percent decrease in loans for office properties, a 62 percent decrease in multifamily property loans, and a 47 decrease in health care property loans.

Among investor types, conduits for CMBS saw a significant decrease of 98 percent compared to last year's fourth quarter.

There was also an 86 percent decrease in loans for commercial bank portfolios, a 73 percent decrease in loans for life insurance companies, and the dollar volume of loans for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac) saw a decrease of 15 percent.

FOURTH QUARTER 2008 11 PERCENT LOWER THAN THIRD QUARTER 2008

Fourth quarter 2008 mortgage originations were 53 percent lower than originations in the third quarter of 2008.

Among investor types, loans for life insurance companies saw a decrease in loan volume of 73 percent compared to the third quarter of 2008, loans for conduits for CMBS saw a decrease in loan volume of 60 percent compared to the third quarter of 2008, commercial banks decreased by 43 percent during the same time span, and GSEs volume decreased 21 percent from the third quarter 2008 to fourth quarter 2008.

Compared to the third quarter of 2008, fourth quarter originations for retail properties saw a 75 percent decrease.

There was a 68 percent decrease for industrial properties, a 66 percent decrease for hotel properties, a 63 percent decrease for office properties, a 35 percent decrease for health care properties, and a 33 percent decrease for multifamily properties.

CONTACT: Jason Vasquez, (202) 557-2950, jvasquez@mortgagebankers.org