3Q commercial/multifamily originations decline.

Position:Commercial - Survey

Commercial and multifamily mortgage bankers' loan originations dipped during the third quarter of 2007, while a year-over-year decrease was seen across most property types and investor groups, according to the Mortgage Bankers Association.

MBA's Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations noted that decreases in total commercial/multifamily mortgage originations were led by a drop in commercial mortgage-backed security (CMBS) conduit loans and commercial bank loans.

These numbers show the impact of the recent credit crunch and other market disruptions, according to Jamie Woodwell, MBA's senior director of commercial/multifamily research.

"The ongoing credit crunch slowed the volume of commercial/multifamily mortgage originations in the third quarter," said Woodwell. "Originations for CMBS fell 28 percent from the same quarter last year, and two-thirds from the second quarter of 2007."

Originations for life companies, the government-sponsored enterprises (CSEs) Fannie Mae and Freddie Mac, and commercial banks all increased between the second and third quarters, leading to an overall decline of just 4 percent between the third quarters of 2006 and 2007, explained Woodwell.

"In addition to the impact of the credit crunch, it's also important to remember that previous periods included large volumes of originations spawned by large portfolio sales and resales, and the privatizations of numerous REITs [real estate investment trusts]," added Woodwell. "These transactions fueled higher origination volumes in previous periods, and augment the differences between those periods and the current one."

The MBA survey revealed that third-quarter 2007 mortgage bankers' originations were 30 percent lower than originations in second-quarter 2007. Among investor types, conduits for CMBS saw a decline in loan volume of 66 percent compared with second-quarter 2007, and loans...

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