CPN - February 2009 - (Page 19)

INDUSTRY PULSE MORTGAGE BANKING tinued. Treasury officials attended the task force’s summit in November, Berman added, and MBA representatives met with officials at Treasury headquarters at the beginning of the year. Berman and others think Congress and the new administration will start addressing commercial real estate finance issues once a general economic stimulus package wends its way to Obama’s desk,particularly as legislators and regulators start debating the long-term fates of the GSEs.“As more immediate issues get resolved, we’ll see an increasing amount of attention and bandwidth,” Berman related. The attention cannot come too soon, as conduit loans maturing over the next few years could become more difficult to refinance than those due this year,cautioned CBRE Capital Markets COO Greg Vorwaller.That is because a far larger chunk of them were funded during 2005 and 2006, when historically high leverage and non-amortizing, interest-only structures ruled, he said. Upton also thinks the commercial mortgage banking community should return to sound credit-management fundamentals before seeking public assistance. Rather than letting greed drive origination practices, as was the case so frequently in recent years, mortgage bankers need to reemphasize accountability, credibility and transparency. But mortgage bankers alone do not control the capital flow, Stoffers noted. Supply of and demand for debt determine rates and terms. And, he concluded,“it’s the lenders J that make those calls.” Visit www.cpnoline.com/finance for more coverage of commercial real estate finance. Resolution? The more far-reaching near-term solutions that mortgage bankers and other stakeholders are proposing to alleviate the credit squeeze are aimed at improving liquidity in the securitized commercial mortgage arena. Perhaps most notably, industry advocates have asked Treasury Department and Federal Reserve Board officials to target $20 billion of the term assetbacked securities loan facility to investors seeking to leverage acquisitions of newly issued, highly rated CMBS. Theoretically this would boost demand for CMBS and help conduit lenders cost-effectively provide funds to refinance existing mortgages. The Mortgage Bankers Association and other industry groups in January asked legislators to target at least $20 billion in federal recovery funds toward a Fed credit facility that lenders could tap in refinancing maturing commercial mortgages. The previous week, House Financial Services Committee chairman Barney Frank had introduced a bill amending the initial economic recovery legislation, authorizing the Treasury secretary to establish such a facility or other means of supporting the flow of commercial mortgage debt, including direct CMBS acquisitions by the Fed. Another proposal is to establish a government-backed commercial mortgage lending and securitization program akin to Fannie Mae’s popular Delegated Underwriting & Servicing network. DUS-loan-origination partners underwrite and service multi-family mortgages that Fannie commits to buying, the delegates retaining some of the default-related loss risk over the life of each loan. The taxpayer-controlled entity would retain profits earned by securitizing—but not holding—and guaranteeing or otherwise credit-enhancing the mortgage-backed securities. The explicit federal government guarantees would presumably help attract bond buyers, again boosting liquidity. To encourage bondholder trusts to extend maturing conduit loans where refinancing appears problematic, lobbyists are seeking amendments of real estate mortgage investment conduit, or REMIC, rules to allow for penalty-free extensions. The adjustments would allow loan servicers to modify maturity dates, principal balances and interest rates even when a loan is not technically in default, thereby avoiding tax penalties for prohibited transactions and preventing trusts from losing their REMIC tax status. Advocates are likewise asking regulators and legislators to revise provisions of the Foreign Investment in Real Property Tax Act to attract more capital from offshore players, modify markto-market accounting rules to boost lender balance sheets and reject new taxes, such as higher capital gains or partnership carried interest, that discourage real estate investment. The Right Solutions™ Capmark Finance Inc. Capmark Finance Inc. provides multifamily property owners and developers with The Right Solutions™ for the acquisition, construction, rehabilitation or refinance of multifamily real estate: Fannie Mae Loans Permanent/Interim Loans Acquisition/Rehab Loans Freddie Mac Loans FHA Loans Refinance Loans Construction Loans Mezzanine/Preferred Equity Equity Delivering … For more information contact: Freddie Mac & Fannie Mae Programs, John Cannon, 215.328.1396, john.cannon@capmark.com Nationwide Loan Origination Network, William Ross, 214.363.5872, william.ross@capmark.com FHA/HUD Program, Karl Reinlein, 314.984.5510, karl.reinlein@capmark.com Capmark Finance Licenses: CA: CA Department of Corporations Finance Lender and Broker License (lending) and CA Department of Real Estate Broker License #00398180 (brokering); MI: Capmark Finance Inc., Michigan Real Estate Broker, Phone 248-208-3460; NV: Capmark Finance Inc., 200 S. Virginia Street, Suite 800-Office #804, Reno, NV, Phone: 775-686-2490; NY: Capmark Finance Inc., New York Real Estate Broker. www.capmark.com ©2009 Capmark Finance Inc. All Rights Reserved. www.cpnonline.com •February 2009 • COMMERCIAL PROPERTY NEWS 19 http://www.cpnoline.com/finance http://www.capmark.com http://www.capmark.com http://www.cpnonline.com

Table of Contents Feed for the Digital Edition of CPN - February 2009

CPN - February 2009 Contents Starting Line Buzzworthy Office Data/Analysis Washington, D.C., Market Profile Ranking: Mortgage Banks & Brokerage Firms Top Deals of 2008 Mortgage Banking Mexico Brokerage Sustainability CPN-Nielsen Claritas Special Report Resource Guide

CPN - February 2009

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