Commercial Lending is Growing (Finally)

Commercial and multifamily mortgage lending is expected to increase in 2014 as lenders’ appetites to place new loans grow even stronger, according to a new Mortgage Bankers Association (MBA) survey of the top commercial and multifamily mortgage origination firms.

MBA polled lenders on their expectations in the New Year. A full 91 percent of the top firms expect originations to increase in 2014, with 48 percent expecting an increase of 5 percent or more. Almost two-thirds (64 percent) expect their own firm’s originations to increase by 5 percent or more.

“Commercial and multifamily lenders anticipate a market in which lending continues to grow, and their firm gets a bigger piece of the pie,” says Jamie Woodwell, MBA’s vice president for commercial real estate research. “Borrowers’ appetites to take out new loans are expected to remain strong, but perhaps drop a bit from 2013 levels. The resulting competition to lend leads originators to expect loan risk to increase marginally in the face of moderating returns.”

A majority of respondents expect originations for commercial mortgage backed securities (CMBS), commercial banks and life companies and pension funds to increase, and for originations for Fannie Mae, Freddie Mac and FHA to decrease: 65 percent anticipate a “very strong” appetite among firms to make loans and 23 percent anticipate a “very strong” appetite among borrowers to take out loans. Lenders were surveyed on a scale of “very weak, weak, fair, strong, or very strong.”

Read more at Florida Realtors®