Reports Show Commercial and Multifamily Lending Increased Dramatically in 2010

By Kyle Chezum Updated on 4/26/2011

 

The Mortgage Bankers Association reported this week that commercial and multifamily loan originations increased by a stunning 44% during the whole of 2010, a surprising leap forward despite the economy's overall financial woes.

Mortgage lenders closed loan deals totaling over $118.8 billion in total value in the commercial and multifamily categories alone.  And there is evidence that this high level of activity was picking up throughout the year, gaining speed.  A third of the reported loans were originated near the end of the year, for a total of $6 billion originated in the fourth quarter.

In addition, 92% of the loans were primary or first liens on the properties in question.  This means that for the most part, equity was being sought and created where there had been none previously.  These aren't just refinance loans.  Many of these loans were used to purchase and develop new commercial properties.

Still, the high numbers don't necessarily point to the end of the crisis.  By far the largest investor that generated the capital for these loans was the Federal Government through Fannie, Freddie, and the FHA.  Private investors will have to do better than that before the outlook improves much.