Commercial mortgage originations surge at year-end.


MBA's QUARTERLY SURVEY OF MORTGAGE bankers shows that during the final quarter of 2002, commercial mortgage originations surged to a pace 18 percent above the same period a year earlier. Commercial mortgage originations were up 5.2 percent for the year as a whole.

"The strong performance of loan Originations in the fourth quarter and for 2002 as a whole undoubtedly reflects the effects of low interest rates on both the refinancing incentives and ability of borrowers to carry mortgages on newly acquired and newly built properties," said Doug Duncan, MBA senior vice president and chief economist. "However, in order to sustain these lending volumes in the months ahead, it will require the economy to pick up and help generate demand for commercial and multifamily rental space."

The 44 MBA members reporting in the survey originated $29.4 billion in mortgages on income-producing properties--up from the revised total of $24.8 billion reported for the same quarter last year. The year-end surge was paced by strong gains in funding by life insurance companies (up 32 percent from a year earlier) and CMBS conduits (up 30 percent). These two sectors alone funded more than $16 billion of loan purchases (55 percent of the total), according to MBA's survey.

The fourth-quarter strength was widespread across property types, with members reporting healthy year-over-year gains in multifamily, industrial, retail and health-care new-loan originations. Even the office sector, where lending activity had been weak earlier in the year, was up 10 percent From a year earlier. Lending for hotels and motels, in contrast, was down 22 percent. The "other" property type category also was off, MBA reported.

Respondents to the survey reported that multifamily lending surged to its highest level of the year during the fourth quarter, at $14 billion. Fannie Mae originations at reporting institutions during the fourth quarter were up percent from a year earlier; Freddie Mac's total was little changed. Together, the two government-sponsored enterprises (GSE) accounted for 40 percent of total multifamily originations--about the same as the third quarter. Reported FHA loan originations were at $967 million during the fourth quarter, up from the same period a year earlier.

The 2002 year-end surge reported by MBA survey respondents pushed total originations for the...

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