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
Tag Archives: CMBS 2.0
CMBS 2.0: What Is It Looking Like? Cash Management & New Recourse Events
Posted in Good Times for Lenders, Market TrendsAndrews & Kurth has a nice "high level" piece on the CMBS market – covering challenges and changes in CMBS since the market crash. And periodically (perhaps too frequently!), I’ve offered up my broader insights on these same subjects (search TT4L using the terms "CMBS" or "2.0"). However, it is important to get very, very… Continue Reading
S&P Withdraws From Rating CMBS 2.0; Now Stock Market Whip Lash – How Will This Impact CMBS 2.0 & CREF Liquidity?
Posted in Good Times for Lenders, Market TrendsI’ve already commented on this MAJOR drag for the recovery of the commercial real estate markets: little liquidity from the public markets – primarily the void formed by the absence of a significant volume of new CMBS loans (now known as "CMBS 2.0"). Last week, S&P withdrew from rating new CMBS pools or issuances. Yes, out… Continue Reading
CMBS 2.0 Taking Shape: SCI Interviews a Broad Group of Industry Players
Posted in Good Times for Lenders, Market TrendsMy "CMBS 2.0 Taking Shape" series focuses (of course) on my perspective: a lawyer closing CMBS loans, and also consulting with other lawyers and paralegals on CMBS loans where I am not the primary closing attorney. Last week, Anna Carlisle with Structure Credit Investor published a nice piece focusing on these important questions from a… Continue Reading
CMBS 2.0 Taking Shape: How Does It Differ From CMBS 1.0?
Posted in Good Times for Lenders, Market TrendsWe all know that recovery for the commercial real estate market will depend, at some level, on greater liquidity in the credit markets. Sure, owners will need to "right size" or revalue their property (by paying down their current debt, purchasing their current debt at a discount, etc.), but eventually the time will come when… Continue Reading
Chilling Questions: Will Suits By RBMS Investors – Spill Over to CMBS? Encourage CMBS 2.0 Transparency??
Posted in Lender Liability, Market Trends, Tough Times for LendersI have asked these questions before – with respect to the US Government suing several home lenders: should commercial lenders be concerned? will CMBS 2.0 give investors needed loan level information? In a rough sense, the first bullet is a new form of "lender liability." On Monday and Tuesday of this week, I was in… Continue Reading
Your Second 5 in Your Top 10 from ’10: More of That Interesting Mix
Posted in Good Times for Lenders, Market Trends, Tough Times for LendersAs I promised in my report on the top 5 topics from your top 10 for ’10, below are the balance of your favorite top 10 blog posts for last year. Your favorite postings show ’10 as a transition year, with significant financial reform, continuous stress testing and important lessons learned – but topped with… Continue Reading
’11 MBA-CREF Convention Recap: New Liquidity? Return to CMBS Dominance?
Posted in Good Times for Lenders, Market Trends, Tough Times for LendersPerhaps the most important “message” from this year’s MBA-CREF convention is this question: Will we (finally) see increased liquidity in the commercial real estate finance sector in ’11? The convention placed a unanimous “yes” to the question, based upon the “return” of the CMBS lending product – as evidenced by recent securitizations, the large number… Continue Reading
More Tips Following Ibanez Case: Is the Trustee Responsible? Will Ibanez impact CMBS?
Posted in Market Trends, Remedies, Tough Times for LendersIn an earlier posting, I briefly touched on who could be responsible for inaccuracies in the legal documents (or the failure to include necessary information in those legal documents) that assign the loan and the loan documents to the current or real owner of the loan. For example, responsible parties could be the loan servicer… Continue Reading
Fallout From the Ibanez case for CMBS? One State Already Fixed; But Federal Fix Needed For CMBS 2.0
Posted in Covered Bonds, Good Times for Lenders, Market Trends, Tough Times for LendersOne outcome from the Ibanez case: comments made by Yves Smith at Naked Capitalism and by Adam Levitin at Credit Slips are now receiving renewed attention: So What Else Has the American Securitization Forum Said That is Wrong? (Smith) ASF Lies Yet Again, Brazenly Asserts That Ibanez Ruling Validates Reliance on PSA for Transfers, Blank… Continue Reading
Capital Market 3 Step: Does Fitch’s announcement point to meaningful loan level standards?
Posted in Good Times for Lenders, Market TrendsAt least one rating agency (Fitch) has announced that it will be looking more closely at loan level valuation. HousingWire reports that Fitch "plans to look more closely at property valuations and loss-coverage multiples when assigning ratings for fixed-rate commercial mortgage-backed securities transactions." My assumption is that this is at securitization or pooling – and… Continue Reading
2010 CRE Credit Snap Shot: More Negative; Some Positive; Lessons Learned (Take Notice)
Posted in Good Times for Lenders, Market Trends, Workout IssuesThis year comes to an end with a commercial real estate market looking different than 2009. Sure, defaults on commercial mortgage loans are mounting, and investors remain concerned. Yet, at the same time, the public credit market (CMBS) is slowly making a come-back. In the midst of this change, there are good lessons to be learned –… Continue Reading
CMBS 2.0 Powering Up? Its Not Easy (That’s Good)
Posted in Good Times for Lenders, Market TrendsSo, where are we on easing the credit crunch, which we need to bring needed credit to distressed commercial real estate? Several good sources correctly give good reports on the CRE market for 2011 and on the fledgling CMBS loan origination pipeline: Matthew McManus at NAI Global reports that "the future [starting in 2011] is… Continue Reading
Securitization Reform and “New” Bondholder Control of Special Servicing: Pathways To CMBS 2.0 & Needed Liquidity?
Posted in Good Times for Lenders, Market TrendsOne of the factors dampening the recovery in the commercial real estate markets is the lack of liquidity. The problem is immense: without liquidity, buyers of distressed debt and foreclosed real estate do not have access to the financing that makes the investment attractive to them; and maturity defaults become a growing reality. Recent… Continue Reading
First Significant New CMBS Issuance: JPMorgan Chase’s $716.3mil Conduit Securitizaton Points To Liquidity Thaw
Posted in Good Times for Lenders, Market TrendsThe lack of liquidity, of course, is a huge drag on the recovery of the commercial real estate market. Buyers of foreclosed properties, or as white knights of deals in distress, need credit as part of the investment mix. As I’ve noted before (prior posting), capital market credit (in the nature of CMBS or… Continue Reading
MBA Servicing & Tech Conference (Day 1): Federal Legislation; REMIC Rules; FDIC Safe Harbor; & Regulation AB
Posted in Good Times for Lenders, Market Trends, Tough Times for Lenders(Blogging from the MBA Servicing & Technology Conference . . . ) One phrase describes the majority of the content today at the sessions attended by me at the MBA Servicing & Technology Conference: "Change is now . . . we just don’t know all of the details." My take away is that some very significant work… Continue Reading
Borrowers Have Tough Questions For The New CMBS 2.0
Posted in Good Times for Lenders, Market TrendsIn an earlier posting on CRE finance reform and market trends, I stepped back and asked the all-important questions: What does all this mean? What is the big-picture? Where is this going? I offered up four perspectives, with these as the first two – 1. The Good: the “return” of the unregulated lender 2. The… Continue Reading
Rating Agency Mistakes? Conflicts of Interest? (Court Ruling & Panel Testimony Point to Challenges for CMBS 2.0)
Posted in Good Times for Lenders, Market TrendsIn two prior postings [first] [second] addressing the CRE finance crisis and market trends, I have explored three (3) topics that point us to answers on these all-important (even personal) questions: What does all this mean? What is the big-picture? Where is this going? Before we address the 4th topic (covered bonds), we need to… Continue Reading
Investment Grade Bondholders Have Tough Questions for CMBS 2.0 (Including Proposed SEC Disclosure Rule)
Posted in Good Times for Lenders, Market TrendsIn an earlier posting on CRE finance reform and market trends, I stepped back and asked the all-important questions: What does all this mean? What is the big-picture? Where is this going? I offered up four perspectives, with these as the first two – 1. The Good: the “return” of the unregulated lender 2. The… Continue Reading
CRE Financial Reform And Market Trends: Opportunity For New Lending But More Extend & Pretend As Defaults Grow
Posted in Covered Bonds, Good Times for Lenders, Market TrendsJames Ruiz recently wrote a piece, published in the Texas Lawyer, summarizing the February 10, 2010 report (“Commercial Real Estate Loses and the Risk to Financial Stability”) issued by the Congressional Oversight Panel. (continue reading link below). It is a good summary of the Panel’s perspective of the credit problems in commercial real estate, and addresses the… Continue Reading
Senate Banking Committee Releases Financial Reform Legislation (Restoring American Financial Stability Act of 2010): CMSA Summary
Posted in Good Times for Lenders, Market TrendsOn Monday, March 15, the Senate Banking Committee released it’s draft of the "Restoring American Financial Stability Act of 2010" [click name to download it]. It is long: 1336 pages. And no surprise at this: it is complicated. Provisions include creation of a consumer protection watchdog housed in the Federal Reserve; creation of a nine-member Financial… Continue Reading
CMSA & Key Industry Groups Push Congress To Avoid “Looming Commercial Real Estate Crisis”
Posted in Good Times for Lenders, Market TrendsAs I noted previously [link], the mid-term elections significantly limit the time period for Congress to pass a meaningful financial reform bill. The “window” for this closes in August – five months from now – when the fall election campaigns kick into high gear. With this short-course in mind, the CMSA and other key industry groups… Continue Reading
CMBS 2.0 & Financial Reform: Industry Comments on FDIC ‘Safe Harbor’ Provisions For Securitization
Posted in Good Times for Lenders, Market TrendsYesterday, the Commercial Mortgage Securities Association (CMSA) submitted a comment letter [download] to the FDIC concerning the FDIC’s ‘Safe Harbor’ rule [down load the FDIC's Advanced Notice of Proposed Rulemaking] covering the securitization of commercial real estate loans. Of course, the CMSA is not the only industry organization to comment on the FDIC’s proposed rule. For… Continue Reading
MBA-CREF Convention (Day 2): Three Perspectives; Wish List Points to a Slow 2010
Posted in Good Times for Lenders, Market Trends, Tough Times for LendersOne take-away for me from the second day of the convention is this: while the three different perspectives (below) point to 2010 being a better or different year than 2009, it will be far from “normal” (when compared to 1994-2004). The Mortgage Banker: relieved The general sense or mood of the mortgage bankers is that… Continue Reading