Multifamily loan problems increased significantly but multifamily REO increased only modestly. Over all banks saw a 24.6% increase in multifamily problems but figures are still dwarfed by the other three categories (commercial, construction, and residential).
Bank owned multifamily balances only increased 6.9% to about $1.6B at the end of Q2. The modest increase could be an indication that lenders are holding out hope for the successful workout of troubled loans.
Nonaccrual balances, loans that are not expected to be repaid according to terms, jumped up 27.9% to more than $6B. Again a relatively modest number all things considered.
Multifamily loans reported as 90 days late increased dramatically, by more than 50%. The small balance though of $649MM means multifamily is likely the least of many lender’s problems.
The total distressed multifamily whole loan and REO (bank owned property) figures stand at about $8.3B. While this figure is a small piece of the total distressed real estate market it represents a big opportunity for the savvy multifamily broker or investor.