Credit Crunch Dampens Loan Origination Volume
Commercial and multifamily mortgage origination volume dipped in the third quarter, based on the Mortgage Bankers Association’s (MBA) quarterly survey. Third quarter originations dropped by 4% versus the same period in 2006. The year-over-year decrease was felt across most property and investor groups.
“The ongoing credit crunch slowed the volume of commercial/multifamily mortgage originations in the third quarter,” says Jamie Woodwell, senior director of commercial/multifamily research for the MBA. “Originations for commercial mortgage-backed securities (CMBS) fell 28% from the same quarter last year, and two-thirds from the second quarter of 2007.”
However, originations for life companies, the government-sponsored enterprises (Fannie Mae and Freddie Mac) and commercial banks all increased between the second and third quarters.
Adds Woodwell: “In addition to the credit crunch, it’s also important to remember that previous periods included large volumes of originations spawned by large portfolio sales [and re-sales] and the privatizations of numerous REITs.”
Among investor types, conduits for CMBS posted a decrease of 28% versus the same quarter in 2006. Commercial banks also posted an 18% decline between those periods, according to the MBA survey.
When compared with the second quarter, third-quarter origination volume fell in all property types except healthcare. In this segment, originations actually increased by 136% between the end of the second and third quarter. The biggest decline was posted in the hotel segment, where origination volume fell by 72% between the end of the second and third quarter.
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© 2008 Penton Media Inc.
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