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CREFC 2018: Faisal Ashraf Weighs in on Lotus Capital’s New Platform

Lotus Capital Partners has been off to the races since it launched in 2016. In addition to arranging $315 million in financing from Mack Real Estate Credit Strategies for the construction and recapitalization of Penn-Florida Companies Via Mizner—a 2-million-square-foot mixed use project in Boca Raton, Fla., last year, the firm just expanded its offerings in launching a loan sale and distribution platform.

The business will serve lenders and investors looking to de-risk and leverage their positions in whole loans, A-notes and mezzanine debt. Lotus has already closed $150 million in private placements, including three ten-year mezzanine tranches on pharmaceutical company Allergan’s new headquarters in Madison, N.J., structuring and separately placed $70 million with Hyundai Asset ManagementMorrison Street Capital and Blackrock. The initiative will be led by Tim Taylor, the former head of special situations at Ten-X.

Commercial Observer caught up with Faisal Ashraf, Lotus Capital’s founder and managing partner, at the CREFC conference in Miami to learn more about the launch.

How has the conference been for you?

I’ve never seen so many happy people in my life. I found bullish sentiments all around. The only bit of frustration I found, which is a little ironic, is that people can’t get their money out fast enough.

Lotus Capital just launched a loan sale and distribution business. Talk us through why it’s the right time to launch a platform such as this. 

There’s a myth that loan sale advisory is a only a countercyclical business that is needed in a downturn. We believe that there’s abundant opportunity to address the capital needs of investors generally in the whole loan format or within their current capital structures. Additionally, we characterize ourselves as the only outsourced capital markets desk in the business, which means that existing lenders can outsource, for example, the A-note distribution of their portfolios to us so that they can leverage yield. As you know, a big part of debt funds’ strategies is to sell off their A-notes.

So, this is a business that has little to do with a downturn but rather the existing need that investors have today and it just so happens that there’s nobody else providing it.  As an example of capital structure distribution and just to test the thesis, I sold $150 million in mezz on behalf of a CMBS dealer recently.  This is a very technical process, it involves negotiating inter-creditor agreements and we have to leave a certain amount of spread so that someone can still have a solid CMBS execution.

What’s the primary benefit in outsourcing the distribution?

While the biggest firms will likely continue to do things internally, not every firm has large or dedicated capital markets capability. I think that, generally speaking, a firm may use our services because they believe we carry different/deeper relationships in the capital markets, or because we have creative methods of structuring that will save them time and money.  For example, we may have 5 new ideas on how to get that paper sold in the Middle East or Far East. In that regard we become an outsourced capital markets private-placement desk.

The proof point in the Allergan deal [Lotus arranged a $115 million 10-year, fixed-rate CMBS financing from a CMBS dealer for Lincoln Equities Group for the new Allergan U.S. headquarters in Madison, N.J.] was that we sourced $70 million of mezzanine of which $50 million was from an investor who had never invested in the U.S. We have a series of relationships that are off-market and allow us to present some interesting solutions. We’re not the silver bullet by any means, but we can give you capital markets expertise, strong distribution and potentially attract the off-market bids from years spent running distribution desks on Wall Street. The upside to this is it allows lenders to focus on their day jobs instead of spending time doing what we do.

Where do you see Lotus Capital going from here?

My goal is for Lotus to be seen as a preeminent real estate investment banking firm—that doesn’t mean that we’ll be the biggest firm in the world, it means that people think about our firm as offering high-touch solutions with regarding to intermediating capital and over time we’ll add other dimensions to the business. For now I’m pleased we are the fasting growing firm of our kind in the country –zero to $1billion in our first full year.  The deals we’ve done and pace we have kept aren’t for the faint of heart.  

What do you expect to see in the industry in 2018?

I see more bullishness. Like every year I expect some hiccups, but the market did a good job of shaking those hiccups off in 2017. With regard to sector-specific expectations, I do believe this will be the year that the retail sector is dealt with a little more thoroughly. I think certain investors will say, “Ok, we understand now what the have and have-nots are, and we will scale down part of our retail portfolio.” And that’s a great opportunity for Lotus to help them address that need and distribute some of that paper. 

Source: commercial

CREFC 2018: Columbia Pacific’s Billy Meyer Talks Competition and Customer Service

Seattle, Wash.-based Columbia Pacific Advisors has had a busy start to the year. It recently closed a $55 million refi/acquisition/ bridge-to-sale financing package in South Boston and a $35 million loan on a stabilized office building in East Hollywood. So far the debt fund has deployed $500 million across 40 loans, and it’s hungry for more. Commercial Observer caught up with Billy Meyer, a managing director at the firm, at CREFC’s annual conference in Miami to learn more about his personal conference agenda.

Commercial Observer: What do you think the general sentiment is here at the CREFC conference?

Billy Meyer: I think the majority of folks in the lending space believe there’s still plenty of deals to be had and opportunities exist for each and every lender, whatever their space is. The volumes for each individual production might be down, simply due to new competition. There’s a lot of money out there and new competitors are trying to find yield in different capacities. So, people are varying their strategies and maybe opening up new funds in order to target different markets. From what I see and from what my peers are saying, there are opportunities and heads are up chasing them down.

What is your competitive edge as a bridge lender, would you say?

In our specific space, communication is a big part of it. You’re partnering with a borrower and that means communicating effectively up front and then throughout the documentation process. The moment we’re first introduced to a new opportunity through to closing on that transaction might take three weeks or five weeks depending on how effective our communication is. We’re a short term bridge lender and we’re able to move very fast, so we need to communicate effectively if we’re going to talk through everything effectively in a short period of time. What separates us is, too, is that our money remains on our balance sheet the entire term of the loan and its fully discretionary based on what we want to do internally—we don’t have to go outside our walls to get approvals from anyone else and we don’t have multiple levels of credit committees. Also, everyone on our team can talk through a deal’s intimate details with the broker or the direct borrower, understand the execution strategy of what a borrower is trying to do and understand what makes sense and what doesn’t.  We pride ourselves with a high level of customer service and we understand that quick responses are what brokers and borrowers are looking for.

What’s a typical deal for Columbia Pacific Advisors?

We’re a lender in every region in the country and on all property types. We are most effective with Borrowers who need money fast, need a high level of confidence in closing, need the money for a short period of time or have a situation that is not quite bankable yet.  We don’t do new construction loans and we don’t do suburban land loans. But we’re very good at senior housing, affordable housing, multifamily, retail, office and self storage. Any type of cash-flowing, commercial real estate is where we excel and can close really fast. Our average loan is about $16 million, but we’re working hard towards increasing it to be $20 to $25 million. We’re hungry to get out there but at the same time we are all investors in the fund so we really care about making good decisions and getting our money back.

So you have skin in the game.

Yes. I have a piece of my own net worth in the fund as well as some of my parents’ retirement money. So with every transaction I think about whether I’m comfortable investing in this deal—I don’t want to lose on a deal and have my parents move in with my wife and kids [laughs]. the fund is entirely made up of private investors. There’s no institutional capital in the fund and nobody dictating what we can or can’t do. We do what we feel is right from a business sense.

What are some of your recent deals?

We did a roughly a $55 million loan in South Boston. It was a debt consolidation of a couple of different loans plus additional funds to acquire an adjacent property. The neighborhood was up-zoned recently so the borrower got a golden ticket. His property per square foot is now worth considerably more. We gave him a refi loan, an acquisition loan and a bridge-to-sale loan at 60 percent loan to value. We also did a loan in East Hollywood that was roughly $35 million.  It was on two adjacent parcels and one stabilized office building that just experienced a major tenant leaving—so it was around 60 percent occupied. The borrower had two loans and one loan matured, so again it was a debt consolidation and bridge-through-stabilization. We refinanced two loans and included proceeds for tenant improvements and leasing commissions.

What was your main purpose in attending the conference?

We’re focused on lead generation. We look to meet with brokers and also other private lenders who do almost exactly what we do but not quite, so lenders who aren’t comfortable lending on affordable housing or senior housing whereas we’re fluent in that space. We’re in the customer service business ultimately and brokers call us and the deal is not a good fit for us, we’ll refer them to who we think could be a good fit. It’s a small world in our lending space and we’re willing to share opportunities within the lending community. I believe there are plenty of opportunities around and greed is pretty low right now, it’s actually a really friendly space.

Source: commercial

CREFC 2018: Say Hello to CLOs

Commercial real estate collateralized loan obligations (CRE CLOs). It’s a bit of a mouthful for sure, and for some, CLOs are a sobering reminder of the pre-crisis Wild West. But, they’re baaack. And, judging by the packed house with standing room only that the CREFC panelists—including issuers, lenders and an investor—spoke to, people are curious about the new and improved 2018 CRE CLO market.

And for good reason: The market is heating up, significantly. Case and point, in December, Blackstone Group issued the largest CRE CLO post-crisis, the BXMT 2017-FL1 transaction, weighing in at a whopping $1 billion. The transaction was collateralized by 31 senior participation interests in loans secured by 71 properties, according to a report by KBRA at the time of the deal’s issuance.

Last year saw almost $8 billion in deal volume, but panelists estimate that amount will easily rise to $12 billion to $14 billion in 2018, driven partly by investor demand for the bespoke financing market. It’s a significant increase, given that in 2016 there was only $2 billion in issuance. That said, the market may be growing but remains disciplined and well balanced, one panelist said.

Today, CRE CLOs are a benign, nonrecourse source of financing that serve a distinct market purpose, panelists noted. Specifically, they solve the capacity issue around balance sheet financing. As an added bonus, when the market is functioning well, a CRE CLO is an accretive form of financing that complements warehouse financing nicely. Further, the deals create new capital markets opportunities and relationships for their participants.

First up in the panel discussion was the question of how recent CRE CLOs differ from CLOs issued pre-crisis. One panelist said that today’s CRE CLOs are “plain vanilla” unlike the more exotic pre-crisis days. But simply put, they have improved collateral quality. Pre-2007, the majority of transactions were more leveraged and the loans pledged as collateral had higher leverage attachment points. Today’s CRE CLOs are also composed entirely of first lien mortgages in contrast to pre-crisis collateral, which consisted of various position in the capital stack.

Most of the loans securitized in today’s CRE CLOs are floating-rate, short-term bridge loans on transitional assets where the sponsor is in the process of implementing a business plan on the property.

The notion that the loans included in the structures must always be cash-flowing is overstated, one panelist said. While generally true, the spectrum of loans in deals varies greatly and rating agencies are very pragmatic on how these loans are viewed. However, ground-up construction loans won’t make the cut.

Lenders also have more flexibility with CRE CLOs than they typically would in a REMIC structure, panelists said, with less servicing restrictions when it comes to modifying the loans. A key factor, given the transitional nature of the underlying collateral and the varying timelines of a borrower’s business plan implementation for those assets.

Tempted to dabble in the space and issue a one-off CRE CLO deal?

Proceed with caution, said participants. Significant resources are required from both an expense and labor perspective in order to pull a transaction together. From pooling the assets in an investor-friendly structure to working with the rating agencies and legal counsel to contending with extended transaction timelines and market volatility. The gestation period can take up to 15 weeks, and in a volatile market, the cost of funds targeted by an issuer can move significantly.  And don’t forget, CRE CLO issuances, like CMBS, are subject to risk retention requirements.

Something else to bear in mind if considering a single deal is that investors are typically more receptive to those who are in the market more frequently, panelists said.

Investors in the asset class areas alwaysresponsible for doing their homework. While one panelist had some concern that this isn’t necessarily always the case, evident in oversubscribed AAA tranches, another panelist argued that investors today are buying CRE CLO bonds based on diligence and underwriting as opposed to ratings—another key differentiation from the pre-crisis era.

One thing is pretty clear, with issuance expected to almost double this year, the use of CRE CLOs for transitional lending will continue for the foreseeable future.


Source: commercial

CREFC 2018: How’s CMBS Doing? KBRA’s Eric Thompson Fills Us In

CREFC’s annual conference at the Loews Hotel in Miami kicked off with an overview of how the CMBS market has been faring, courtesy of Eric ThompsonKroll Bond Rating Agency’s senior managing director. All eyes have been on CMBS with the financing source proving its competitiveness in 2017 and going up against bank and life company loans. Proof is in the pudding, and last year’s issuance volume neared $90 million, surpassing most analysts’ expectations.

Single-borrower issuance in particular increased by a whopping 88.7 percent in 2017 year over year to $36.5 billion, while conduit issuance remained flat at $48.5 billion.

KBRA expects single-borrower issuance to remain strong in 2018. “There’s a number of factors that might contribute to that,” Thompson told Commercial Observer between panels. “Some borrowers may be seeking to lock in a better rate than they currently have, do so ahead of rising interest rates and take some value accretion out of a property. It is also anticipated that M&A activity may spur acquisitions that result in capital market financings.”

There is also a couple of dynamics going on in the single-borrower space that make it appealing to market constituents, Thompson said: “One is that while it can be a very competitive market for pricing and execution for issuers that can lead to compressed profit margins, they can pre-place a lot of the debt with investors and have a good idea of where that execution might be. Two, I think there’s a deeper pool of subordinate buyers who are willing to buy further down in the capital stack because they’re comfortable with the credit on a single asset and comfortable in looking at their basis from the perspective of owning it. Unlike in a conduit deal, if things do go bad, you have more transparency into what conditions can effectuate a change in control as there is only one asset.”

KBRA is aware of a dozen or more single-borrower transactions coming down the pipeline as the year begins and expects to see up to three CRE CLOs issued by mid-February.

At 57 percent, 2017 appraisal LTVs were at their lowest since KBRA began rating conduits in 2012, which is both good and bad. “The issue is that when you have that level of leverage CMBS is competing more with insurers and banks. Even if banks pull back because of regulatory concerns, you have more competition than you would even if you had marginally higher leverage.”  

Historically a financing source dedicated to assets in secondary and tertiary markets, one interesting trend uncovered in KBRA’s research last year was CMBS’ increasing exposure to primary markets. “We found that primary markets default less than secondary markets by two to three points. When they do default, they have losses that are five points less than any other market,” Thompson said. “In the most liquid MSAs, the default rate is actually half that of other market tiers. So this is a positive credit element and a bright spot in terms of trends from prior years.”

CMBS loans in the largest, most liquid markets MSAs—New York, Boston, Washington, D.C., Chicago, Los Angeles and San Francisco—reached 33 percent in 2017, up from 28.1 percent in 2016. When combined with exposure to the next 11 largest MSAs, that percentage pierced the 50 percent level for the first time in KBRA’s rating history, reaching 54.3 percent (compared with 45.5 percent in 2016).

In his opening remarks, Thompson cautioned that, while primary market’s diverse economies can certainly withstand downturns, oversupply is always a concern to consider.

In terms of property types, 2017 was the year of the office with CMBS exposure to the asset class increasing to 39 percent. Perhaps unsurprisingly, retail exposure took a hit, dipping to 25.4 percent after averaging above 31 percent in previous years.

And while delinquency levels remain low, they are increasing. KBRA’s conduit portfolio delinquency rate reached 0.44 percent by year-end 2017, up from 0.15 percent at the end of 2016. The increase was somewhat expected given seasoning in transactions, Thompson said. Term defaults historically peaking between years four and six; the bulk of the delinquency (0.32 percent) is from the 2013 and 2014 vintages.

As one of the most buzzed-about topics at the CREFC conference, it looks like CMBS will continue to shine in 2018.

 


Source: commercial

The Future of Fannie and Freddie

When it comes to the matter of the government’s role in multifamily lending, it’s like having a record on repeat.

During the financial crisis, the government-sponsored enterprises known as Fannie Mae and Freddie Mac were put into conservatorship to preserve bondholders’ wealth. And they’ve been a matter of partisan and political disagreement ever since. Now, a new plot to privatize them has spurred a renewed discussion about their fate.

As the administration, the Federal Housing Finance Agency—which controls the GSEs—and the private sector—frothing for more multifamily exposure—prepare to square off, Fannie and Freddie’s destiny hangs in the balance.

A PR Problem

While primarily known for their programs that help individuals finance single-family home purchases, less familiar but perhaps as important is Fannie and Freddie’s multifamily lending platform, which is used to build and maintain much of America’s workforce housing.

Observers in both parties readily admit that Fannie and Freddie make tremendous amounts of money from their multifamily businesses, which even in the recession’s darkest days, did not see significant losses. But, alas, because the two are so tightly bound, multifamily lending is dragged down along with the once-troubled single-family mortgage business in discussions of how to further privatize—or at least involve more private money in—agency lending, while simultaneously preserving liquidity, or at least not creating market-halting liquidity shocks.

“It’s a sector that doesn’t really deserve to be in conservatorship,” said Lisa Pendergast, the executive director of the Commercial Real Estate Finance Council, of the multifamily side of agency lending. “Since we started talking about what to do with the GSEs…[politicians] spend 98 percent of the time talking about single family, and then they throw in multifamily because it performs so well.”

But the single-family platform’s nagging public relations problem is also the commercial finance business’s. Both could be privatized, following a brief capital raise, if a new plan pushed by investors like John Paulson, the president of hedge fund Paulson & Co., who also has President Donald Trump’s ear, were implemented. Those who’ve seen this discussion play out before are skeptical—both about the decision to privatize the agencies and the likelihood it is politically possible.

“It’s risky business to privatize because, if it’s not done smartly, it’s going to increase the cost of borrowing,” said Robert Ivanhoe, the co-chairman of law firm Greenberg Traurig. “A lot of people could lose a lot of money because of the change in spreads.”

Of course, if done effectively, there are plenty of private lenders who would like to take a larger piece of the multifamily lending pie—an area where it’s hard to compete with the 4.25 or 4.5 percent interest rate on a 10-year loan that Dan Brendes, a managing director with mortgage lender Berkadia, estimates borrowers are currently getting from Fannie.

But Fannie and Freddie have been on the block—to varying degrees—before. In 2014, a Republican bill was before the Senate Banking Committee asking for Fannie and Freddie to be moved out of conservatorship and be instead backed by an entity more like the Federal Deposit Insurance Corporation. But, just as in the many other instances where politicians have called for the agencies to be rolled into new entities, or even be abolished altogether, the bill went nowhere.

GSE reform is hard for any Democrat to visibly waver on because the GSEs have been a singular engine behind expanded lower- and middle-class home ownership since the end of World War II. On the Republican side, leaders disagree about how to go about it. Treasury Secretary Steven Mnuchin has said the matter of Fannie and Freddie’s future will be a focus of the new administration later this year. But what form that focus will take is still unknown.

Skin in the Game

The GSEs are complicated entities, which makes them hard for politicians and their constituents to parse. But their complexity doesn’t keep them from becoming a political target for those who would like the government out of the business of guaranteeing loans.

The agencies do not actually originate loans themselves but rather pool mortgages from primary lenders, which are in turn securitized. Unlike standard mortgage-backed securities, agency-issued bonds are essentially guaranteed by the government. A 2012 amendment to the agreement between the U.S. Department of the Treasury and Fannie and Freddie capped the losses the government would take in the event of the agencies’ failure at $258 billion, according to Bloomberg News.

Last week, the conversation began anew when a proposal that Ivanhoe calls “an opening salvo” was revealed: an administrative fix to what has so far been a very hard-to-legislate issue. Investment bank Moelis & Co., with support from companies like Blackstone and Paulson & Co., put forward a blueprint to recapitalize both GSEs and release them from conservatorship without putting the matter before Congress, as Bloomberg News first reported. 

But observers say the likelihood the Moelis plan moves ahead quickly is low. A spokeswoman for the Federal Housing Finance Agency told Bloomberg that the FHFA still believes that Congress should decide and that FHFA Director Mel Watt would not consider the blueprint. 

“It wouldn’t surprise me if something doesn’t happen until Watt’s term is up,” Pendergast said. Not to mention how many feathers such a strategy could ruffle.

“It is odd that for years Republicans were criticizing [President Barack] Obama for not going through Congress,” Barney Frank, former Massachusetts representative and an author of the most significant financial regulation to follow the Great Recession, the Dodd-Frank Wall Street Reform and Consumer Protection Act, told Commercial Observer. “Why are they doing [this] by executive fiat?”

An executive at a major nonbank lender who asked not to be named also raised an important question: Where would the money come from? If not provided by the government, what would incentivize private sources to hand over money to the agencies before the privatization has even happened?

Proponents of the Moelis blueprint say it returns $100 billion to taxpayers, according to Bloomberg, but did not specify over what period of time the figure refers to. Representatives for Fannie and Freddie did not respond to requests for comment for this story.

Arguably, the assertion that privatizing the GSEs returns money to taxpayers obscures the issue of to whom those profits would then fall.

“I’m sure there is some self-serving reason that hedge funds like [Paulson & Co.] are supporting this,” Ivanhoe said. Paulson & Co. reportedly owns stock in Fannie and Freddie.

One also assumes since multifamily agency lending “has become massively profitable ever since about 2010,” according to Ivanhoe, any investor with a debt platform wants in on that. An executive with a major lender said he believes “30 to 40 percent of the institutional investor asset class” is regularly relying on agency financing.

The biggest winners from a retreat by agencies? Life insurance companies and CMBS investors who want more exposure to multifamily, according to the executive, who asked not to be identified.

There’s also the issue of whether or not the U.S. government has made back what it spent propping up the GSEs and paying their bondholders in 2008 and 2009. The widely quoted number for the cost of their bailout is $187.5 billion.

But while much of the business community is amenable to GSE reform, there is little agreement on how it should work. The prominent industry group the Mortgage Bankers Association doesn’t think the Moelis blueprint goes far enough and the organization’s president told Bloomberg the proposal was “self-serving.”

The MBA has its own proposal for GSE reform, which suggests that the government “replace the implied government guarantee of Fannie Mae and Freddie Mac with an explicit guarantee at the mortgage-backed security level only, supported by a federal insurance fund with appropriately priced premiums.”

The MBA proposal also suggests that Fannie and Freddie’s successors, created by the government, be the first guarantors for securities they handle. Then a regulator would be empowered to charter other guarantors, somewhat similarly to how public utilities are treated by the government. The guarantors would issue MBS, hold some mortgages on their books and use reinsurance and other instruments to hedge risk. The regulator would calculate an appropriate risk appetite for the guarantors. The backstop federal insurance fund would only kick in if a guarantor failed and all private capital in the stack “had been exhausted,” the MBA proposal says.

In recent years, informal proposals have also been floated to roll together Fannie and Freddie into one GSE and to separate the multifamily lending platform from the single-family mortgage platform, Pendergast said. Those provisions could still be on the table as the conversation around GSE reform evolves.

Can’t Unring the Bell

But whichever tack the administration takes on the thorny issue of changing the ownership structure of these large and complex institutions, one thing is for sure: The ball is now officially rolling, and what aspects of Fannie and Freddie’s business are changedand howis a matter of concern to borrowers and lenders. As mission-driven enterprises, the GSEs facilitate lending for affordable housing and for green building and retrofit. Both of those objectives could be under fire with the proposed changes, although the Moelis plan says the agencies would continue to promote affordable housing if adopted.

Right now, Fannie and Freddie offer lower rates for multifamily projects with an affordable component or those that make commitments to reduce energy or water consumption.

“Fannie stipulates that if the borrower commits to a scope of work to reduce the water consumption by 20 percent,” they can receive a discount of about 39 basis points on a loan with a 30-year amortization, said Tony Liou, the president of energy consultant Partner Energy. For Freddie Mac loans, the commitment is 15 percent reduction for a discount of between 10 and 20 basis points, often, he said.

While Freddie’s green lending platform is new, Fannie has been originating loans with green requirements for about four years, Liou said.

The focus on lending through the green programs is partially because such loans do not count toward the cap—$36.5 billion annually—of loans Fannie and Freddie can do. In encouraging more owners to get the discounts, they increase their total volume and fulfill their mandate.

The green financing platform has proved very popular with lenders and borrowers. “We are utilizing green every opportunity we get,” Brendes said. “It’s some of the best pricing in the market.”

Asked if he worries the green program will be targeted by the reform plans, Liou said he “thinks it would be myopic to do so,” but it is possible.

Affordability is a different beast, although one in which other players, such as the U.S. Department of Housing and Urban Development, are also involved.

Ivanhoe, Frank and Brendes said they worry about a loss of liquidity and increased cost of capital for some multifamily borrowers in the event of privatization. The age of American housing stock and the demographic strains on it—as millennials live in rental housing longer—make the supply and maintenance of affordable housing even more important, they said.

“GSEs right now are focused on workforce housing,” Brendes said. He said he worries about how new affordable housing will be built if drastic changes to the GSEs are implemented. “It’s very challenging to build [affordable housing] today.”

Some in the commercial finance world do want reform but urge caution.

“I think there’s support for bringing them out of conservatorship,” Pendergast said. But, “it’s more about finding a strategy” to do so that that preserves liquidity.

All sides of the discussion continually repeat one strain: Do this with haste, and you risk cratering a market that is vital for Americans’ housing and many firms’ business.

Frank said he doesn’t believe any recapitalization and release would serve the borrowers Fannie and Freddie are supposed to, though he was quick to add that he’d not been briefed on the Moelis plan. If loans continue to have 30-year interest rates, something is needed to “provide some mechanism whereby people can buy a reasonably priced hedge against dramatic interest rate fluctuation,” he said.

Ivanhoe was more direct: “What’s best for the real estate industry? Leave it alone.”


Source: commercial