CSBJ Daily

The volume of commercial mortgage originations during the first quarter plummeted by 53 percent from a year ago, according to an index maintained by the Mortgage Bankers Association.

The sharp drop comes after declines of 16 percent and 4 percent in the two prior quarters.

Every major lender group, except for Fannie Mae and Freddie Mac, saw sharp drops in their mortgage origination activity.

With bond spreads on commercial mortgage backed securities ballooning to record levels during the first quarter, it became unprofitable for CMBS lenders to write loans. Their originations dropped by 96 percent from the same period last year.

Even life insurance companies, which were expected to pick up some of the slack created by CMBS lenders’ virtual exit from the market, saw a 25 percent decline in quarterly volume. And commercial banks saw a 28 percent drop in volume.

Fannie and Freddie, meanwhile, saw a 62 percent increase in Q1 originations, hitting a record-high for the quarter. That increase was on top of a 41 percent increase during the fourth quarter.