Dive into the BankProspector dashboard to find out which banks are holding the most non-performing notes now.

Multifamily

Over 50% of non-performing multifamily loans continue to sit in the nonaccrual stage. This now totals almost $3B. 

Non-performing multifamily loans hit a new high in Q2 2024, at more than double the dollar volume banks held at the same time last year.

Deteriorating performance in this sector is a pattern we’ve seen growing for almost two years. More institutions continue to report holding these late stage default loans, with 293 banks reporting they held them in Q2 2024.

There are also over $2.4B in newly 30-89 day late loans coming behind these. 

Multifamily REO

Multifamily REO dollar volume has grown almost 50% since Q1, and is more than double compared to last year. REOs have also tripled as a percentage of overall distressed MF loans since the end of last year. 

Looking Ahead

Income properties are still highly desired by investors and funds. However, high inflation and high interest rates, and with many areas becoming increasingly less friendly to landlords, many of these properties don’t seem to be attracting the buyers or financial bailouts they did in recent years. 

Log in now to see which banks are holding the most distressed multifamily loan notes…

Commercial real estate debt has continued its two-year trend of deteriorating performance, according to the latest data from US banks. However, some categories of consumer debt have seen apparent improvement over the past three months. 

CRE mortgage debt performance has continued to deteriorate since 2022, with the dollar value of non-performing commercial loans hitting another new record in Q2 2024, landing it nearly 70% higher than the same quarter last year.

At the end of Q2 2024, 530 banks reported holding commercial REOs. 

Moving into Q3 2024, non-performing CRE loans held by banks included:

• $1.6B in 30-89 day late owner occupied loans 
• $20B+ in nonaccrual stage non-owner occupied CRE loans (up almost 40% this year)
• $3B in 30-89 day late non-owner occupied loans 
• $4B plus in nonaccrual stage owner occupied CRE loans

Find out which banks have the most non-performing commercial loans inside BankProspector.

Construction Debt

Nonperforming construction loan volume appears to have peaked at its two year high, staying steady at the same dollar value as in Q1 this year.

The largest percentage of this debt is still in commercial development loans. Most of this debt is still in the nonaccrual stage, now a pool of over $2.7B in loans. This is up by around $400M from last quarter, which was almost double that from last year. 

This is followed by newly defaulting loans in the 30-89 day late stage, which is also up to almost $2B. 

Banks are still holding just under half a billion dollars in construction REO, with 375 banks reporting holding these non-performing assets.

Other Debt

Agricultural

One of the strongest performers of the past two years, farmland debt, has once again seen improvement over the past three months. 

Both newly late loans and REO volumes have fallen from the previous quarter’s figures. 

The largest part of this pool is around $700M in non-accrual debt, followed by $453M in newly late loans, and just $37M in REO (half that of the first quarter).

Business Debt

Business debt performance has held steady in Q2, with just a slight hint of improvement since its two-year record worst in Q1. 

More than $16B in non-performing C&I loans are in the nonaccrual stage, up $3B over the since the end of last year. 

Newly late loans total around $7B, while $2.5B sits in the 90 day plus category, showing more and more of this debt is ending up in later stage and uncollectible status. 

Consumer Debt: Auto Loans & Credit Cards

Auto loan debt continues its usual seasonal cycle, with a slight deterioration in Q2. This could put this sector on track to a new three-year record if this pattern holds through December 2024.  

Credit card debt performance appears to be one of the surprise highlights of this quarter’s data. Loans in the 90+ day late category fell by around $2B this quarter, suggesting the worst performance may have peaked at the end of 2023.

Looking Ahead

While this year’s presidential election and other political factors could well alter the current trajectory, some types of commercial and consumer debt performance appear as though they may have peaked in distress, with some even showing improvements. 

However, investors should be aware of annual seasonal performance cycles. 

Commercial mortgage loans have also continued to worsen in performance for two straight years, with over $24B in nonaccrual stage loans.

Ongoing inflation, higher interest rates, a new tech revolution continuing to impact jobs, and economic policy and regulations seem set to be major influencers of markets through the end of 2024. 

Still, high asset valuations, Fed rate cuts, and more programs pushing help for homebuyers currently offer investors great opportunities to profit from distressed debt.

Log in now to see which banks are holding the most distressed notes.

Residential loan performance seems to be showing slight improvement in 2024. With the usual seasonal trends demonstrating less distress during the second quarter. 

Still, US banks hold tens of billions of dollars in non-performing debt, with a likelihood of an increase in delinquencies by the end of the year. 

Let’s dig into the latest bank data from Q2 to see exactly what is going on…

Banks Hold Over $44B First Position Non-Performing Residential Mortgages

As in the previous quarter, US banks reported over $16B in first mortgages on 1-4 family properties which are in the 30-89 day late stage this quarter. Down again from the previous two quarters. 

However, many of those who are falling into default are not finding help or able to get out of it, evidenced by a slight increase in REOs, and defaulting second liens. 

In the pipeline are also almost $16B first position non accrual loans on 1-4 family residences, as well as over $12B in 90 day plus late loans, which have not yet been categorized as non accrual. 

Residential REOs

648 banks reported holding residential REO at the end of the second quarter this year, down by about 40 from the end of last year.    

At $766M, this is slightly higher than in the previous quarter, yet represents just 1% of the total volume of distressed residential loans being reported. 

Higher housing prices have probably helped minimize the number of loans in this bucket, so far.

Non-Performing Residential Loans

The largest percentage non-performing residential first position mortgage loans is now in the newly late category.  

As of Q2 the distribution of non-performing first mortgage liens being reported includes:

• $16.2 in 30-89 day late loans
• $12.2B in 90 day plus late and still accruing loans
• $15.9B in non-accrual loans

Discover the 3,000 plus banks holding these non-performing loans inside BankProspector now.

Junior Liens

At the end of the second quarter of 2024 there were almost $4.5B in non-accrual stage revolving lines of credit, down slightly in dollar volume, but 1% more of the total distress pool, compared to Q1.  

Additionally, there were around $1.6B in newly delinquent HELOCs behind those as well as close to $173M in 90+ day late home equity lines of credit. Both of these categories have increased over the past three months.

Defaults on revolving credit lines (HELOCs) continue to be far higher than on fixed second mortgage liens. 

Dive into the BankProspector dashboard to find out which banks are reporting the most distressed residential junior lien loans and HELOCS.

Looking Ahead

Bank data from Q2 2024 shows the residential loan market holding steady, with minor improvements. 

This is typical for this time of year, with an increase in distress and more defaulting loans typically coming at the end of the year. 

How this year ends up for investors, borrowers, and their lenders appears to be heavily weighing on the outcome of the upcoming Presidential election.

Log in now to see which banks are currently holding the most distressed loans…

Dive into the BankProspector dashboard to find out which banks are holding the most non-performing notes now.

Multifamily

Almost 60% of non-performing multifamily loans now sit in the nonaccrual stage. This now totals over $2.22B. 

Nonperforming multifamily loans hit a new high in Q1 2024, at around double the dollar volume banks held in Q3 2022.

This is a trend we’ve been seeing since 2022. A pattern that continues to spread to more institutions, with 277 banks reporting that they held non-accrual stage multifamily mortgage loans in Q1.

More loans appear to be making it to the nonaccrual stage, with over $1.3B in 30-89 day late loans. 

Multifamily REO

Despite banks apparently being successful in heading off defaults before the final stages,  banks only reported holding $106M in multifamily REO in Q1.

However, this is more than double that on banks’ books as of the beginning of the year.

Looking Ahead

Income properties are still highly desired by investors and funds. However, high inflation and high interest rates, and with many areas becoming increasingly less friendly to landlords, many of these properties don’t seem to be attracting the buyers or financial bailouts they did in recent years. 

Log in now to see which banks are holding the most distressed multifamily loan notes…

Non-performing commercial real estate debt and all major categories of consumer debt appear to be up substantially on a year-over-year basis, continuing a two-year streak of culminating distress. 

CRE mortgage debt performance has continued to deteriorate since 2022, with the dollar value of non-performing loans hitting a new record yet again this past quarter.

Even farmland loans, which appeared to be the one outlier that bucked the overall trend now appear to be falling victim to the wider economic trend as well 

At the end of Q1 2024, 531 banks reported that they held commercial REOs, up again from the previous quarter.

Moving into Q2 2024 non-performing CRE loans held by banks included:

• $1.6B in 30-89 day late owner occupied loans 
• $18.2B in nonaccrual stage non-owner occupied CRE loans (up by over 20%)
• $3B in 30-89 day late non-owner occupied loans 
• $3.9B in nonaccrual stage owner occupied CRE loans

Find out which banks have the most non-performing commercial loans inside BankProspector.

Construction Debt

Non-performing construction loan volume also hit a new record high, and is at its highest in at least two years. 

The largest percentage of this debt is still in commercial development loans. Most of this debt is now in the nonaccrual stage, now a pool of over $2.3B in loans which is an over 20% spike from last quarter. And that volume was already up substantially from this time last year (almost double). 

This is followed by newly defaulting loans in the 30-89 day late stage, a pool of almost $1.4B in loans. 

Banks are still holding just under half a billion dollars in construction REO. Though, with 375 banks now reporting holding these non-performing assets, the distressed is spreading across more institutions. 

Other Debt

Agricultural

Farmland debt had continued to outperform all other debt classes over the past two years. Now it seems to be falling prey to wider economic trends, with non-performing debt in this sector back to its highs of two years ago. 

The largest part of this pool is around $640M in nonaccrual debt, followed by $560M in newly late loans (up $200M over the previous quarter), and just $60.5M in REO. 

Business Debt

Business debt performance continues to deteriorate, also hitting a two year record. 

More than $16B in non-performing C&I loans are in the nonaccrual stage, up $3B over the previous three months. Which was up $1B from Q3 2023. 

Newly late loans total around $7B. $2.9B sits in the 90 day plus category, showing more and more of this debt is ending up in uncollectible status.

Consumer Debt: Auto Loans & Credit Cards

Both auto loan and credit card debt have continued their two-year streak of worsening performance on a year-over-year basis, though down slightly from their Q4 peaks. 

Around over $17B in credit card debts have recently fallen into default. Another $18B is over 90+ days late and around $15B in auto loan debt is now classified as non-performing.

Looking Ahead

Although we may have seen auto loan and credit card debt come down slightly from last quarter’s highs, even these pools are at new highs on an annual basis. 

While the residential mortgage market seems steady, distress across commercial categories could easily spill over into the housing market. Especially with consumers being stretched to the breaking point. 

Ongoing inflation, higher interest rates, a new tech revolution impacting jobs, and economic policy seem set to drive more borrowers to the brink of bankruptcy. 

Yet, high asset valuations also currently offer investors great opportunities to profit from distressed debt. 

The most obvious wild card that is likely to influence the direction of debt performance over the next year is the upcoming presidential election.

Log in now to see which banks are holding the most distressed notes.

Overall residential loan performance appears to have remained steady. Yet, in spite of some moderate decline in the dollar volume of non-performing loans, banks still hold tens of billions of dollars in defaulting debt, with much of it making it all the way to the nonaccrual stage. 

Let’s dive into the latest bank data from Q1 to see exactly what is going on…

Banks Hold Over $45B First Position Non-Performing Residential Mortgages

US banks reported over $16B in first mortgages on 1-4 family properties which are in the 30-89 day late stage which is down slightly from the final three months of Q4. 

However, many of those who are falling into default are not finding help or able to get out of it.

Already ahead of those in the pipeline are around $16.6B first position nonaccrual loans on 1-4 family residences as well as almost $13B in 90 day plus late loans, which have not yet been deemed nonaccrual. 

Residential REOs

667 banks reported holding residential REO at the end of the first quarter this year, down by about 20 from the previous quarter.    

At $742M, this is slightly lower than in the previous quarter, and still a small percentage of the total volume of distressed residential loans being reported. 

High housing prices have likely helped minimize the value of loans in this bucket. 

Non-Performing Residential Loans

The largest percentage non-performing residential first position mortgage loans is now in the newly late category.  

As of Q1 the distribution of non-performing first mortgage liens being reported includes:

• $16.2B in 30-89 day late loans
• $13B in 90 day plus late and still accruing loans
• $16.6B in non-accrual loans

Discover the 3,000 plus banks holding these non-performing loans inside BankProspector now.

Junior Liens

At the end of the first quarter of 2024 there were over $4.5B in nonaccrual stage revolving lines of credit, up again from the previous quarter, and more than double the dollar value than last year. 

Additionally, there were around $1.5B in newly delinquent HELOCs behind those as well as close to $168M in 90+ day late home equity lines of credit. 

Defaults on revolving credit lines (HELOCs) continue to be far higher than on fixed second mortgage liens.

Dive into the BankProspector dashboard to find out which banks are reporting the most distressed residential junior lien loans and HELOCS.

Looking Ahead

Bank data from the first quarter shows the residential loan market steady, with minor improvements. 

More loans seem to be ending up in the later stages of default. Though, with two thirds of middle class Americans reporting that they are in financial hardship in a recent poll, it shouldn’t be surprising if new defaults spike again later this year. About 46% of those surveyed say they do not even have $500 saved for emergencies. 

At the same time, high housing prices and appetite for real estate investments continue to make this a strong and profitable sector. 

Log in now to see which banks are currently holding the most distressed loans…

Dive into the BankProspector dashboard to find out which banks are holding the most non-performing notes now.

Multifamily

Year end reports from US banks showed a dramatic rise in non-performing multifamily loans as we rolled into 2024, a trend we’ve been seeing since Q3 2022.

It’s a pattern that seems to be spreading across more institutions, with 259 banks reporting that they held non-accrual stage multifamily mortgage loans in Q4.

More loans appear to be going the distance to the non-accrual stage, with several hundred million more added, after soaring by almost $4B in the third quarter.

Multifamily REO

Although banks do not seem to be successful in heading off defaults before this stage, with only $43M in multifamily REO, the demand for these non-performing real estate assets still appears to be there. Or other investors have been successful in acquiring these delinquent loans, and turning them around.

Looking Ahead

Multifamily debt and income properties are still highly desired by sophisticated investors and funds. Perhaps even more so today given the outlook for other areas of the economy and other asset classes.

Still, tenants are under increasing financial distress, with inflation set to soar again in 2024. This along with maturing multifamily loans in a high rate environment is likely to create more defaults.

Log in now to see which banks are holding the most distressed multifamily loan notes…

Commercial loans set another new record for non-performing volumes in Q4 2023. Yet, again, marking another two-year high in delinquency and distress.

CRE mortgage debt, as well as consumer debt has seen distress escalating in an epically dramatic way this year.

The two exceptions this quarter appeared to be construction loans, and once again, farmland loans, which have continued to outperform other classes of mortgage debt.

At the end of Q4 2023, 517 banks reported that they held commercial REOs, a rate that had been declining all year.

Moving into Q1 2024 non-performing loans held by banks included:

• $1.6B in 30-89 day late owner occupied loans
• $16.4B in nonaccrual stage non-owner occupied CRE loans
• $2.8B in 30-89 day late non-owner occupied loans
• $700M in 90+ day late non-owner occupied loans (A 175% volume increase from the previous quarter)

Find out which banks have the most non-performing commercial loans inside BankProspector.

Construction Debt

Non-performing construction loan volume remains near its recent highs.

The largest percentage of this debt remains among single-family and twinhome development loans, with most defaults now in the nonaccrual stage. At $3.3B, this is up substantially from the previous 3 quarters, and has increased in volume by 90% since Q1.

This is followed by newly defaulting loans in the 30-89 day late stage; a pool of over $1.2B in loans, back down to similar levels seen in Q2.

Banks are still holding just under half a billion dollars in construction REO, with 359 banks now reporting holding these nonperforming assets.

It is worth noting that more developers appear to be selling off whole projects, which may help pay off loans. Though indicates a pessimistic outlook of the new homes sales market.

Other Debt

Agricultural

Farmland debt has continued to outperform all other debt classes over the past two years, which may have been further aided by the recent and ongoing boom in the cannabis industry.

The largest part of this pool is around $650M in non-accrual debt, followed by $340M in newly late loans, and just $59M in REO.

Business Debt

Business debt performance has deteriorated again, now close to its two year record high for delinquency and defaults.

More than $13B in nonperfoming C&I loans are in the nonaccrual stage, which is up $1B over the previous three months. Newly late loans total around $8B, up by $1.3B. And, $2.8B sits in the 90 day plus category.

Consumer Debt: Auto Loans & Credit Cards

Both auto loan and credit card debt have continued their two-year streak of worsening performance, hitting dramatic new highs of distress.

The question remains just how much these debt pools can balloon before they impact the wider economy.

Ongoing hyperinflation, high taxation, rising interest rates, and tens of millions of jobs being wiped out by AI are still not likely to help create any change here over the next couple of quarters.

Around over $20.5B in credit card debts have recently fallen into default. Another $20B is over 90+ days late. Over $17B in auto loan debt is now classified as nonperforming.

Looking Ahead

While we are seeing some moderation in construction debt performance, and farmland loans continue to do well, overall commercial debt performance continues to deteriorate, with dramatic volumes of defaults among credit cards and auto loans.

Few mortgage defaults seem to be ending up sitting on lenders’ books as REO, suggesting an appetite for well-priced deals, with plenty of opportunity for conversions and repurposing property in booming industries.

The data hints at a widening disparity, with masses in financial trouble, and some big winners that seem to be snowballing their gains.

Log in now to see which banks are holding the most distressed notes.

The residential mortgage loan sector seems to be following its typical seasonal pattern, with another uptick in non-performing loans in Q4.

An additional $2.5 billion in newly late residential loans were reported at the end of the year, along with a slight increase in 90+ day late loans.

Let’s dive into the latest bank data from Q4 to see exactly what is going on.

Banks Hold Over $47B First Position Non-Performing Residential Mortgages

Banks saw an increase of more than $3B more in non-performing first position residential loans in the last three months of the year.

US banks reported over $17B in first mortgages on 1-4 family properties which are in the 30-89 day late stage, up by around $2.5B from the previous quarter, and up around $7.5B from Q1. This suggests that more homeowners may be plummeting into financial distress…even before their year-end shopping sprees show up on their credit card statements.

Already ahead of those are around $16.5B first position non accrual loans on 1-4 family residences, as well as over $13B in 90 day plus late loans, which have not been classified as non accrual yet.

Residential REOs

678 banks reported that they held residential REO at the end of Q4 2023, up slightly from Q3, and almost double than in Q1.

At $752M, this is still a very small percentage of the total volume of distressed residential loans being held by banks right now.

This could easily accelerate this year as households finally run out of credit and savings while grappling with ongoing extreme inflation and a further deteriorating job market.

Non-Performing Residential Loans

The largest percentage non-performing residential mortgage loans is now in the newly late category.

As of Q4 the breakdown of non-performing first mortgage liens being reported includes:

• $17.5B in 30-89 day late loans
• $13.1B in 90 day plus late and still accruing loans
• $16.5B in non-accrual loans

Discover the 3,000 plus banks holding these non-performing loans inside BankProspector now.

Junior Liens

At the end of Q4 2023 there were over $4.4B in nonaccrual stage revolving lines of credit. Additionally, there were around $1.65B in newly delinquent HELOCs behind those as well as close to $200M in 90+ day late credit lines.

Defaults on revolving credit lines (HELOCs) continue to be higher than on fixed second mortgages.

Dive into the BankProspector dashboard to find out which banks are reporting the most distressed residential junior lien loans and HELOCS.

Looking Ahead

Bank data from the fourth quarter shows the residential loan market in about the same shape as as the previous two quarters. Yet, with a fresh surge in newly delinquent loans.

Landlords and homeowners face ongoing financial challenges impacting their ability to pay; most notably, inflation and unemployment.

The opportunities are growing for investors as increases in residential loans enter the non-performing pipeline.

Log in now to see which banks are currently holding the most distressed loans…

While banks seem to be reporting few new defaults on multifamily loans in Q3, we’ve seen another substantial increase in the volume non-performing multifamily loan mortgage loans moving into the nonaccrual stage.

Dive into the BankProspector dashboard to find out which banks are holding the most non-performing notes now.

Multifamily

Fewer new multifamily delinquencies may be happening. Yet, nonaccrual, 90+ days late, and multifamily REO pools all seem to be growing.

This trend seems to be spreading across more institutions, with 258 banks reporting that they held nonaccrual stage multifamily mortgage loans in Q3, a trend we’ve seen growing over the past two quarters.

90+ late loans nearly quadrupled in the past three months, to almost $200M while nonaccrual stage loans increased by almost $4B in the third quarter.

Multifamily REO

After a huge increase in Q2, almost tripling from Q1, multifamily REO value almost halved in Q3.

This could be a sign that although banks do not seem to be successful in heading off defaults before this stage, the demand is still there for liquidating these non-performing real estate assets as REOs.

Looking Ahead

Multifamily debt and income properties are still highly desired by sophisticated investors and funds, perhaps even more so today given the outlook for other areas of the economy and other asset classes.

Yet, tenants are under increasing financial distress, and many of the best properties may have already been acquired.

Investors may look earlier on in this pipeline of distressed multifamily loans to spot the best properties. Then find banks they can work with to create win-win-win solutions for lenders, borrowers, and their partners.

Log in now to see which banks are holding the most distressed multifamily loan notes…