Nonbanks are originating more commercial mortgages on fixer-uppers in response to a sharp drop in the cost of funding in the securitization market. These deals are said to be "vastly different" than other CRE instruments that sustained big losses in the crisis — so far.
First the House and now the Senate have included provisions in their regulatory relief bills that bankers say would go a long way toward clearing up confusion over how to treat high-volatility commercial real estate loans.
The Terrorism Risk Insurance Act was created after 9/11 to serve as a crucial federal backstop for commercial real estate insurers, but an analysis of alternatives to fund the program reveals the continued challenges of measuring and predicting terror risk.
The trend of putting ever-smaller pieces of the same commercial mortgages into multiple securitizations requires investors to be extra careful, and will inevitably make workouts of bad loans more complicated.