As reported in our most recent Bank Default and Lending Report, the combined default rate on banks' commercial and multifamily mortgage loans fell to 3.75 percent in the third quarter of 2011. The new accounting reflects a 19-basis point drop from the second quarter's 3.94 percent default rate and a 67 basis point decline from the cyclical peak of 4.42 percent a year earlier.
Most Banks Still Drawing Down Exposure to CRE
In spite of the improvement in legacy loan performance, many banks are still drawing down their exposures to the property sector. The outstanding balance of banks' multifamily and commercial real estate loans fell by $3.1 billion during the third quarter, reflecting a small net increase in multifamily loans and a larger offsetting decline in commercial loans.
Read more...GlobeSt.com - Unimpeded by Legacy Distress, Healthier Banks Making CRE Loans - Chief Economist Article
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