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Category Archives: Market Trends

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OCC’s Commercial Real Estate Lending Handbook: Misses the List on Legal Issues

Posted in Articles, Good Times for Lenders, Guaranty Issues, Market Trends, Remedies, Technology Notes, Training

Over the last few weeks, I’ve commented on the new version of the OCC’s Commercial Real Estate Lending Handbook (I give it a gentlemen’s C); and I listed a few legal topics that deserve some guidance from the OCC. “Guidance” could even merely be a list of important topics (ending with a warning that the… Continue Reading

A Familiar Shadow: Anticipating CFPB’s Impact On Commercial Lending

Posted in Articles, Good Times for Lenders, Market Trends, Technology Notes

The July 2013 issue of the “Mortgage Banking” magazine focuses on the Consumer Financial Protection Bureau (or “CFPB”).  The coverline  is this: “CFPB – A Powerful New Overseer.” Why my interest in this issue and coverline? In the past, commercial lenders (and their lawyers) blissfully ignored anything involving consumer lending.  We quickly distanced ourselves from… Continue Reading

Commercial Real Estate Lending: Lessons from 2012 and Predictions for 2013

Posted in Articles, Good Times for Lenders, Market Trends

The combination of 4 speaking engagements and working on 4 new (or revived) lending products buried me during the last several months.  Fortunately, I’ve navigated the course, and it is a new year.  It is time to take a look back at 2012, and step out with some comments on 2013. New commercial real estate… Continue Reading

Construction to Permanent Loan on the Return: Tips on Due Diligence and Loan Documents (part 1)

Posted in Good Times for Lenders, Market Trends, Training

Credit seems to be more available for commercial real estate.  For example, I know of one commercial real estate lender working on a construction to permanent loan program.  This type of lending blends two types of loans: a construction loan to build the project and a term loan to finance it once the project hits… Continue Reading

Why Do Lenders Disdain Bankruptcy Court? 2 Cases Show “Why” and Offer Lessons

Posted in Good Times for Lenders, Market Trends, Remedies, Tough Times for Lenders

Two recent cases are good examples of “why” secured lenders, who hold liens on real property, correctly view bankruptcy court as a very, very, very bad place.  One case has received a lot of attention, including an appeal of the decision and state legislation; and the second bankruptcy ruling was overturned on appeal. The lessons… Continue Reading

Fed’s New “Market Risk” Rule on Regulatory Capital for Banks Expected Soon: how will it impact liquidity for commercial real estate?

Posted in Articles, Good Times for Lenders, Market Trends

Answer: badly. The Federal Reserve’s new rule on regulatory capital requirements for banks will be announced in the next couple of days.  It probably will mean less money for commercial real estate. The scope of this new rule will help the banks (by requiring them to hold more in reserve) but it could hurt the… Continue Reading

As “Bad-Boy” Recourse Liability Spreads to Construction Lenders . . . Is the End Near for Non-Recourse Liability??

Posted in Good Times for Lenders, Guaranty Issues, Market Trends

Once upon a time and in a very simple time,  construction lenders required full payment and performance guarantees, and only permanent lenders offered non-recourse financing (with “bad-boy” liability).  Now, even some construction lenders include a variation of non-recourse liability (with “bad-boy” events) in their structure.  And, the list of “triggers” or events that form the… Continue Reading

MBA Report Shows Good Trends in Bad Numbers; BUT Judicial Foreclosure is a DRAG (I have questions)

Posted in Articles, Good Times for Lenders, Market Trends, Remedies, Tough Times for Lenders

Recently, the Mortgage Bankers Association published its “National Delinquency Survey” for the fourth quarter of 2011.   The report covers the delinquency and foreclosures  rates on first-lien mortgage loans, and includes @ 88% of all single family homes in the US.  Although the survey does NOT cover commercial mortgages, the data gives us important incite on trends AND information on the… Continue Reading

New CMBS Model Should Focus on Ownership – add a Stick to the Carrot

Posted in Good Times for Lenders, Market Trends

Much of the discussion surrounding “cures” to the CMBS model focuses on using “risk retention” as a consequence to the loan originator, which forces the commercial lender to bear the loss.  That hurts.  It’s a real stick. The model needs a carrot and a stick.   Here’s an idea that deserves discussion: focus on the… Continue Reading

Enforceability of Due-on-Sale Clauses: The Case for Collective Amnesia

Posted in Good Times for Lenders, Market Trends, Training

I’ll admit it: I’m old and getting older. This hit me earlier this week as I argued  with a lawyer about the enforceability of due-on-sale clauses in commercial mortgages.  The conversations boggled my mind, because the debate was “settled” in 1982 when Garn-St. Germain (citation below) was enacted – and the debate ended: due-on-sale clauses… Continue Reading

2012 MBA-CREF Convention (Day Two) – “Play It Again” is the Forecast

Posted in Articles, Good Times for Lenders, Market Trends

The MBA does a great job in planning sessions, and in selecting a location where lenders and their mortgage bankers can meet. The convention takes place at the beginning of the year, so that the lenders can articulate their goals, which allows immediate feedback from the mortgage bankers; and gives the mortgage bankers direction in… Continue Reading

2012 MBA-CREF Convention Starts: Top Topics Span Good Times, Tough Times & Technology

Posted in Good Times for Lenders, Market Trends, Technology Notes

Yesterday (Sunday) was the first day of the 2012 MBA-CREF Convention.  The theme or tag-line is “Where Market Makers Meet.” The formal sessions start today, which cover content planned by the various councils comprising the MBA. Some times the “off the record” content is just as interesting as the planned presentations.  (Or maybe they just… Continue Reading

“Good” News in CRE Finance in ’12? Not Really (& Real Uptick for CMBS Requires a 3-step)

Posted in Market Trends, Technology Notes

Rick Jones at Crunched Credit has a thoughtful piece where he offers a hopeful picture for commercial real estate debt markets in 2012.  I can’t go there. On several basic points he’s overly optimistic (his view in bold).  My view is this: Unemployment (6-7%): for the next 3-4 years, the new normal is +8% –… Continue Reading

Lessons Learned: More Tips on Topics to be Included in Loan Documents (& Modifications)

Posted in Market Trends, Training, Workout Issues

Periodically I touch on topics that could be, or should be, covered in loan documents – either when the loan is initially closed and funded, or when the terms of the loan are revisited during an extension or a restructure (collection of blog posts on "lessons learned" [it is a long list]).    Here are… Continue Reading

Financial Reform (Dodd-Frank Act) Watch: Outlook for 2012 and beyond? Tepid

Posted in Market Trends

(Continuing my "change is our friend" focus as we start 2012 . . . ) At the fall meeting of the American College of Mortgage Attorneys, Maureen Young‘s overview of financial services reform under Dodd-Frank contained an insightful outlook for 2012 and beyond. Capital is KING: greater capital and liquidity standards.  Well-capitalized banks will eat troubled banks. My comment… Continue Reading

More Trouble: Will Record Online Sale Numbers Transform Sticks & Bricks Retailing in 2012? I say “yes”

Posted in Market Trends, Technology Notes, Training, Workout Issues

2012 should be the year when online sales broadly impacts "how" retailers view and use their "physical" stores.  This will impact both the owners AND the lenders. Record online sales point to the need (RIGHT NOW) to take a different approach in reviewing and approving retail leases – which for lenders with shopping center and… Continue Reading

Facebook’s Impact on Commercial Real Estate: Connected Apartment Community + Lender Remedies = Misery??

Posted in Market Trends, Technology Notes

This is a wonderful time of the year.  And maybe I simply need to move on, to stop beating the drum about lenders needing to come to the technology party,  and to drop this thought: Social media tools, like Facebook, will make a foreclosing lender miserable, unless the lender understands the tools and thoughtfully takes… Continue Reading

Special Purpose Vehicle (SPE): Comment in Recent US Supreme Court Case Encourages Bankruptcy Risk

Posted in Good Times for Lenders, Market Trends, Single Purpose Entity, Workout Issues

Recently, Professor Joshua P. Fershee posted a very interesting observation on the Business Law Prof Blog.   Professor Fershee comments on a legal concept called the "single enterprise" theory, and on references to this concept by the US Supreme Court in a decision published by it this past summer (Goodyear Dunlop Tires Operations, S.A. v…. Continue Reading

Defaulted Hotel (California) Loans: Nice Story in Bloomberg; Here are some practical tips

Posted in Market Trends, Remedies, Tough Times for Lenders, Workout Issues

Nadja Brandt and Kara Wetzel with Bloomberg have a nice piece on the scope of and challenges in dealing with defaulted hotel loans in CMBS pools.  It is a good read.  And it has been picked up or syndicated in other news media. As I’ve noted before, with a hotel or motel securing the loan,… Continue Reading