Tuesday, December 1, 2009

Commercial Loan Compliance | Multifamily Origination Drops 40%

Over the past year multifamily loan defaults have been on the rise even though housing analysts believe there will be more renters because of a weak job market.

The origination of commercial mortgages backed by apartment buildings fell 40% in 2008 to $88 billion with a small cadre of lenders dominating the market, according to an analysis released by the Mortgage Bankers Association.

The trade group said 2,877 different lenders funded multifamily loans during the year with PNC Real Estate, Wachovia (now part of Wells Fargo), Wells Fargo, Capmark Financial and Deutsche Bank Commercial Real Estate having the largest market shares. (Capmark recently filed for bankruptcy protection.)

The Mortgage Bankers Association found that 26% of lenders that funded Multi-Family loans made just one mortgage on these properties in 2008. And two-third of originators made five or less.

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