CMBS 2.0 Reps and Warranties Take Center Stage
For several months investment-grade bondholder, b-piece investor and special servicing (collectively, "investor") interests have been in the laboratory, working on a version of loan representations and warranties that protects their interests and cures the perceived ills of pre-recession CMBS loan underwriting. At the behest of the Commercial Real Estate Finance Council (CREFC), investor interests are now meeting with loan originator, loan seller and issuer (collectively, "issuer") interests to see if there is consensus for a set of so-called "model" reps and warranties. The notion is that issuers would be free to make whatever loan reps they chose, but would have to disclose differences between the model reps and theirs. There is an obvious negative presumption attached to reps that depart from the model set.
Ruthless
Fitch Ratings’ weekly U.S. CMBS Market Trends newsletter released today disclosed that CMBS loan delinquencies in June pushed the delinquency rate to 8.14% (Fitch Ratings’ delinquency index includes 2,962 loans totaling $35.9 billion that are at least 60 days delinquent or in foreclosure out of the agency’s rated universe of approximately 40,000 loans comprising $440.8 billion). June also marked the fifth straight month of loan resolutions in excess of $1 billion, as $1.5 billion of loans leaving the index in June helped to offset the $2 billion of new delinquencies.
The Line Reports from Andrews Kurth's Mid-Year Real Estate Roundtable - Part III: Vuvuzelas
In most soccer games there comes a moment, usually around the 60 minute mark, when tired legs and passionate fans recommit and reenergize for the final push. Depending on the country or stadium, that’s when the cheering, flare burning, singing, flag waving, or blowing of vuvuzelas intensifies and the teams rally.
The Line Reports from Andrews Kurth's Mid-Year Real Estate Roundtable - Part II: Examining Investor Expectations and the Increased Role of Government
Continuing our series of posts from Andrews Kurth's 2nd Annual Mid-Year Real Estate Roundtable on June 22...
The Line Reports from Andrews Kurth's Mid-Year Real Estate Roundtable - Part I: "Trophies and Train Wrecks": Distressed Asset Strategies and Opportunities
Andrews Kurth hosted its 2nd Annual Mid-Year Real Estate Roundtable on June 22. The panel included Lindsey Wright from special servicer C-III Asset Management, Trey Morsbach of the real estate services firm HFF (Holliday Fenoglio Fowler), Bert Crouch of Invesco, an institutional investor and pension advisor, and Andrews Kurth partner Pat Sargent, who is also the immediate past president of the Commercial Real Estate Finance Council.
Big Bambu
At the CRE Finance Council convention in New York this week, an exuberant band played at a networking cocktail party, economists reported upbeat data and issuers and originators boldly committed to start pushing money out the door. That was the good news. The bad news: the band members were moonlighting investment bankers and lawyers, the servicers didn’t share the same optimism and the uncertainty of regulatory and accounting reform still looms.
The Line Reports from the CRE Finance Council Conference: Distressed Asset Investors "Back on Offense"
Panelists from Brookfield Real Estate Financial Partners, Eastdil Secured, The Blackstone Group, Oaktree Capital Management and PCCP surveyed the state of the distressed asset market and the motivations of buyers and sellers.
It Comes with the Territory
In those days, there was personality in it... There was respect, and comradeship, and gratitude in it. Today, it’s all cut and dried, and there’s no chance for bringing friendship to bear—or personality. You see what I mean? They don’t know me anymore.
–Willy Loman, Death of a Salesman
Hot Topics in CMBS Loan Servicing (and Some Thoughts on Document Drafting for CMBS 2.0)
With this post I've decided to take a discussion from the MBA Servicing Conference last week ("Hot Topics in CMBS," which included panelists from CWCapital, KeyBank, Principal, Moody's and Situs and focused on current servicing problems associated with CMBS loans) and examine loan documentation, particularly what CMBS 2.0 has to correct.
The Line Reports from the MBA Servicing Conference: Multifamily Servicers Report Increased Watchlist Loans, Prepare for Wave of Maturing Loans
Panelists from Fannie Mae, Freddie Mac, Wells Fargo and M&T Realty Capital concurred that, with fewer refinancing options available to borrowers near-term, maturity defaults pose a looming problem that will initially spike in 2013. The number of stressed loans is mounting as well, pushing more loans to watchlist status and requiring greater servicer resources.