Trade Associations Band Together to Promote Securitization

By Kleege, Stephen | American Banker, September 15, 1992 | Go to article overview

Trade Associations Band Together to Promote Securitization


Kleege, Stephen, American Banker


A trio of trade groups has stepped up efforts to spur securitization of commercial real estate loans.

The National Association of Realtors, the National Realty Committee, and the Mortgage Bankers Association of America said at the NAR's annual real estate finance roundtable last week that they have pitched in more than $500,000 to start a consortium. Its mission:

* Improve data.

* Standardize loan documents to simplify the pooling of loans.

* Fight for relief from capital and accounting rules that block securitization by banks and insurance companies.

A New Urgency

An active secondary market has long been on the commercial real estate industry's wish list because loan sales would free up capital for new lending and refinancings. But faced with the worst conditions since the Depression, securitization has moved to the top of the agenda.

A liquidity crisis and recessions was enough to get residential loan securitization off the ground two decades ago, recalled Robert J. Eisenberg, a former regional director of the Federal Home Loan Mortgage Corp..

"This will be a replay of 1969," Mr. Eisenberg predicted.

Private-Label Packaging

In liquidating the assets of bad thrifts, the Resolution Trust Corp. has found buyers for more than $8 billion of investment-grade securities backed by commercial real estate loans.

Now the challenge is to find a cheaper way for private issuers to package loans to investors once the RTC supply dries up, said John B. Levy, senior vice president of NationsBank's NationsBanc Mortgage Corp.

What is now a small market could ultimately grow to $450 billion, if 40% of commercial realty loans and 50% of multifamily loans can be resold, said Kerry Vandell, chairman of real estate and urban land economics at the University of Wisconsin.

Model Being Developed

To fuel that growth, the new consortium is financing an attempt by the University of Wisconsin to create a risk-rating and pricing model for the securities and to create a national data base on real estate market conditions.

Credit rating agencies require issuers of securities backed by property loans to set aside reserves or sell subordinate securities -- probably much larger than necessary. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Trade Associations Band Together to Promote Securitization
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.