Commercial loan delinquencies rise in California

March 8, 2009


California’s commercial loans are beginning to experience the strain of a weakened economy, according to a recent industry survey.

According to a quarterly Commercial Loan Delinquency Survey conducted by the California Mortgage Bankers Association, the state’s fourth quarter delinquency rate increased to 0.15 percent – up from .08 percent in the third quarter of 2008 and triple last year’s rate.

In all, of the 10,748 loans included in the survey, 25 were found to be more than 30 days delinquent. By number, the 25 delinquent loans represent 0.23 percent of the loans included in the survey.

The loans total $141.5 million out of a combined total of more than $92 billion. The survey considered any loan delinquent if it is two or more payments past due.

California’s multi-family properties are particularly affected, as the delinquency rate is now 0.23 percent up from 0.18 percent three months ago. In multi-family units, 14 loans, totaling $79.6 million of an outstanding total of $33.8 billion were reported delinquent, as were $13.4 million of a total of $16.1 billion of retail and shopping center loans. There were no warehouse or industrial loans past due.

The “other” category in the survey included a $18.5 million loan on a “mixed use” property and two loans of $8.7 million and $2 million respectively on “health care” properties.

Thirteen of the 17 companies that participated in the survey reported no loans that were more than 30 days delinquent. The companies that participated in the CMBA study included loans on apartments, retail, industrial and other commercial properties for institutional investors such as life insurance companies and pension funds.

With headquarters in Sacramento, the CMBA represents the residential and commercial real estate finance industry.

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