The special servicing rate for office and mixed-use property loans held in commercial MBS saw the largest monthly deterioration.

A strong pipeline should help keep momentum going for commercial MBS issuance in the fourth quarter. But long-term challenges remain due to the government shutdown.

Big increases in securitization of mortgages on office properties, retail and lodging fueled a 30% increase in non-agency CMBS issuance in the third quarter. Agency multifamily MBS volume was up 4% from the second quarter. (Includes two data tables.)

Fed still working toward a Treasury-only balance sheet; BlackRock, Hoplon units partner to bring in new ABS issuers; ABS East set for record attendance; CREFC adjusts plans for DC symposium.

Residuals from securitizations can generate close to 20% in returns though the asset class carries significant risks. Nonbanks are showing a strong appetite for the asset, but there is limited liquidity.

Issuance of commercial MBS in 2025 is poised to surpass last year’s volume. It’s been a strong year for CMBS across asset types except office space.

Commercial MBS servicers are utilizing appraisal reduction amounts and nonrecoverable advance determinations more often as servicer advances increase.

The first-quarter CMBS market was a tough act to follow, and non-agency securitization fell off sharply in the April-June cycle. Multifamily was a bright spot, including a big increase in Fannie issuance. (Includes two data tables.)

Researchers say the avalanche of lease cancellations initiated by DOGE in the first half of 2025 has reduced cash flows and lowered the price of the first-loss tranches of CMBS.

To this point, Freddie has issued multifamily risk-sharing transactions without ratings. The Morningstar DBRS rating could open these multifamily CRT deals to institutions that only invest in rated transactions.