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Third-quarter commercial loan originations signal limited impact of Sept. 11

Mortgage bankers originated $18.7 billion in commercial and multifamily real estate loans during the third quarter, and expressed sentiments that fourth-quarter volumes would be even higher despite tighter credit standards, according to a survey by Mortgage Bankers Association of America. This compares with $17.7 billion in loans originated during the second quarter of 2001 and $14.1 billion in the third quarter of 2000.

Only about one-third of survey respondents reported a reduction in demand — ranging from 10% to 50% — due to the attacks of Sept. 11. However, most reported a rebound in loan volumes and indications that fourth-quarter volumes were approaching or exceeding pre-Sept. 11 levels. Lower interest rates are a key driver of the continued demand for real estate financing.

In addition, 73% of CMBS conduits, 71% of pension funds, 69% of commercial banks and 65 % of life companies responding to the survey reported tighter credit standards.

Life companies financed the largest share of commercial and multifamily loans — 25.6% of the dollar volume versus 25.1% for CMBS conduits — originated during the quarter.

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