Sponsored by:

"The commercial/multifamily mortgage market continues to be buoyed by modest long-term interest rates, improving property fundamentals and strong equity flows. The result is a quarter with record originations, record increases in mortgage debt outstanding, near records in CMBS issuance and record increases in commercial bank’s commercial/multifamily mortgage holdings." --Doug Duncan, MBA's chief economist and senior vice president of research and business development.

Commercial/Multifamily Mortgage Debt Outstanding Tops $2.5 Trillion
Industry Pressing Congress To Compromise On Terrorism Insurance Bill
Deadline Nears on US Terror Insurance Expiration
House Passes Brownfields Redevelopment Enhancement Act

U.S. CMBS Hotels in Full Recovery Mode, Moody's Says
MBA Research DataLink Premieres January 3

Largo Arranges $4M Golf Course Financing with StanCorp

MBA Advocacy Update

Commercial/Multifamily Committee Update
MBA Research Survey Available Online
Future Leaders Deadline on December 31

Magoffin Defines CMB Pride, Accomplishment, and Respect

Flexible CMBS Documents Add Service to Capital

At the end of the third quarter 2005, $2.5 trillion in commercial/multifamily mortgage debt outstanding was recorded by the Federal Reserve, an increase of $83.8 billion (a new record for a quarterly increase) or 3.4 percent from the second quarter. Multifamily mortgage debt outstanding stood at $641 billion at the end of the third quarter - an increase of $9 billion or 1.5 percent from the second quarter.

"The commercial/multifamily mortgage market continues to be buoyed by modest long-term interest rates, improving property fundamentals and strong equity flows," said Doug Duncan, MBA's chief economist and senior vice president of research and business development. "The result is a quarter with record originations, record increases in mortgage debt outstanding, near records in CMBS issuance and record increases in commercial bank’s commercial/multifamily mortgage holdings."

The third quarter also saw $38.3 billion in issuance of commercial mortgage backed securities (CMBS), 78 percent more than the same quarter last year and three percent less than the second quarter’s record issuance level.

The Federal Reserve Flow of Funds data summarizes the holding of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in the Federal Reserve data under Life Insurance Companies) and in CMBS for which the security issuers and trustees hold the note (and which appear in the Federal Reserve data under CMBS issuers).

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, with $1.1 trillion, or 43 percent of the total. Many of the commercial mortgage loans reported by commercial banks however, are actually "commercial and industrial" loans to which a piece of commercial property has been pledged as collateral and it is the borrower's business income - not the income derived from the property's rents and leases - that drives the underwriting, pricing and performance of the loan. Since the other loans are income property loans, meaning that the income primarily comes from rents, the commercial bank numbers are not comparable.

CMBS pools are the second largest holders of commercial/multifamily mortgages, holding $499 billion, or 20 percent of the total. Life insurance companies hold $261 billion, or 10 percent of the total, and savings institutions hold $193 billion, or eight percent of the total. Government Sponsored Enterprises (GSEs) and federally related mortgage pools, including Fannie Mae, Freddie Mac and Ginnie Mae, hold $128 billion in multifamily loans that support the mortgage-backed securities they issue (referred to here as federally related mortgage pools) and an additional $65 billion "whole" loans in their own portfolios, for a total share of eight percent of outstanding commercial/multifamily mortgages. (As noted above, many life insurance companies and some GSEs also purchase and hold a large number of CMBS issues. These loans appear in the CMBS category referenced above).

Looking just at multifamily mortgages, the GSEs and Ginnie Mae hold the largest share of multifamily mortgages, with $128 billion in federally related mortgage pools and $65 billion in their own portfolios – 30 percent of the total multifamily debt outstanding. They are followed by commercial banks with $136 billion, or 21 percent of the total; savings institutions with $97 billion, or 15 percent of the total; CMBS issuers with $84 billion, or 13 percent of the total; state and local governments with $57 billion, or 9 percent of the total; and life insurance companies with $42 billion, or 6.5 percent of the total.

In the third quarter, commercial banks saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $49 billion, or five percent, which represents 59 percent of the total $83.8 billion increase. CMBS issuers increased their holdings of commercial/multifamily mortgages by $23 billion, or five percent - representing 27 percent of the net increase in commercial/multifamily mortgage debt outstanding.

In percentage terms, real estate investment trusts (REITs) saw the biggest increase in their holdings of commercial/multifamily mortgages - a jump of 20 percent - while nonfarm, noncorporate businesses saw the biggest drop (a net change of minus 11 percent).

The $9.2 billion increase in multifamily mortgage debt outstanding between the second and third quarters represents a 1.5 percent increase. In dollar terms, commercial banks saw the largest increase in their holdings of multifamily mortgage debt - an increase of $6.5 billion, or five percent, which represents 71 percent of the total increase.

Federally-related mortgage pools saw an increase of $1.8 billion, or 1.4 percent, in their holdings. Savings institutions increased their holdings of multifamily mortgage debt by $1.6 billion, or 1.7 percent.

In percentage terms, REITs recorded the biggest increase in their holdings of multifamily mortgages, 4.1 percent, while state and local government retirement funds saw the biggest drop, minus 64 percent.
(Back To Top)

Industry Pressing Congress To Compromise On Terrorism Insurance Bill
Associated Press/Insurance NewsNet (12/15/2005) Abrams, Jim

Congress has a few days left to decide the future of one of the legacies of the September 11 attacks, federal backup for terrorism insurance sought by the nation's builders and investors.
(More)
(Back To Top)

Deadline Nears on US Terror Insurance Expiration
Reuters (12/15/2005) Roberts, Kristin

The U.S. House and Senate remain no closer to a last-minute deal to extend a program of government guarantees to cover losses from terrorism, despite compromise language floated this week, sources said Wednesday. Still, negotiations continue and congressional leadership once again stated their intention to pass a bill extending the Terrorism Risk Insurance Act before it expires December 31.
(More)
(Back To Top)

House Passes Brownfields Redevelopment Enhancement Act
MBA (12/15/2005) Murray, Michael

The House approved H.R. 280, the Brownfields Redevelopment Enhancement Act, introduced by Rep. Gary Miller, R-Calif. The legislation would provide greater access to capital by eligible public entities and Indian tribes that traditionally had difficulty obtaining financing for brownfields redevelopment activities.

“H.R. 280 provides communities with the flexibility they need to finance Brownfields redevelopment projects," Miller said. "It makes improvements to the BEDI [Brownfields Economic Development Initiative] program, ensuring that communities who have traditionally had trouble obtaining financing for Brownfields Redevelopment activities have access to needed capital. This legislation gives local communities a valuable tool to address blight, create new jobs, and expand their tax base.  With the flexible access to the BEDI grant program that this bill provides, we can help revitalize Brownfields sites across the country.”

The legislation would authorize appropriations for BEDI and eliminate the requirement that local governments obtain section 108 loan guarantees as a condition for receiving BEDI funding. The bill makes brownfields-related environmental cleanup and economic development activities eligible for community development block grant (CDBG) assistance and authorizes the HUD Secretary to establish a pilot program for national redevelopment of brownfields.

House Financial Services Committee Chairman Michael Oxley, R-Ohio, said there are thousands of brownfield sites in Ohio and H.R. 280 would help speed the cleanup and redevelopment of those contaminated properties, as well as create new jobs and opportunity. "The bill will especially benefit smaller communities that have not been able to receive assistance under the Brownfield Economic Development Initiative before," Oxley said

The Financial Services Committee approved H.R. 280 by voice vote on March 16. Similar legislation was introduced in the 108th and 107th Congresses. During the 108th Congress, H.R. 239 was approved by the Committee on March 5, 2003.  During the 107th Congress, H.R. 2941 was approved by a unanimous voice vote in the House on June 5, 2003.

Brownfield sites are those areas where redevelopment is complicated by potential environmental contamination but where contamination is not at a level to qualify the site under the Superfund Act.  By promoting the redevelopment of brownfield sites and revitalizing the communities around them, local jurisdictions could improve quality of life and environment in these areas

(Some articles under Industry News are from a news service called Moreover.com and do not necessarily reflect the views and policies of the Mortgage Bankers Association).
(Back To Top)

Moody’s Investors Service, New York, said it expects $5.8 billion in hotel CMBS volume in 2005, up from nearly $1.3 billion in 2004.

"The increase comes from all segments," said Moody's analysts E.J. Park and Natalka Purij, authors of a report titled U.S. CMBS: Moody's Approach to Analyzing Transitional Hotel Properties. "Corporate transient, meeting, and group travel have increased with the expansion of the economy while the deeply discounted leisure and weekend rates that predominated for the last few years have diminished."

The recent recovery and growth of hotel revenue per available room (RevPAR), which posted a gain of 7.7 percent for the year-to-date period ending October 2005, is a large part of the reason for increased investor appetite in the hotel sector, the report said. In 2004, a 7.8 percent increase occurred in the sector.

Following the terrorist attacks of September 11, hotels suffered RevPAR declines in 2001 and 2002, and achieved only a slight uptick in 2003. However, as capital continues to flow into the sector, Moody's said an increase in the number of transitional hotel properties—hotels under renovation or with planned major upgrades—contributed to CMBS deals.

"As hotel owners strive to improve profitability by applying different renovation strategies, some CMBS lenders are sizing loan proceeds by factoring in the anticipated net cash flow increases," the report said.

Park and Purij caution that "care must be taken in including anticipated cash flow improvements in underwriting because, in many cases, redevelopment programs are only in the initial planning stages at the time the loan is funded."

Moody’s said it takes into account the risk of value creation plans that may not be realized as intented when a hotel undergoes repositioning. As part of Moody’s review, the rating agency assessed renovation programs and determined proposed capital expenditures necessary to maintain a property’s market position income and the amount of additional value created, if any, on the property.
(Back To Top)

MBA Research DataLink Premieres January 3
MBA (12/15/2005) Rawak, Melissa

The Mortgage Bankers Association will publish a new quarterly newsletter online next year based on its Commercial Real Estate/Multifamily Finance Quarterly Data Book. MBA Research DataLink will consolidate research articles and statistics from the Quarterly Data Book and other sources to focus on the latest trends in the commercial real estate/multifamily finance industry.

MBA will send out the quarterly online publication on the first Tuesday of every quarter beginning January 3. Readers of MBA Research DataLink will continue to find headlines and statistics on recent trends in commercial real estate updated weekly through MBA Commercial/Multifamily NewsLink.

"When it comes to the commercial/multifamily finance industry, there's more information available than ever,” said Jamie Woodwell, MBA’s senior director of research in commercial real estate/multifamily finance. “Each week MBA's Commercial/Multifamily NewsLink covers the latest trends and conditions in the industry. And once a quarter, DataLink pulls the most informative articles into one place."

MBA Research DataLink combines MBA’s Quarterly Data Book of economic outlooks and statistics from MBA, the Federal Reserve Board, the U.S. Census Bureau, the Bureau of Labor Statistics and other agencies, with research articles from commercial and multifamily industry analysts to present an “information digest” for the quarter.

"Each quarter, MBA Research DataLink will serve as the one-stop shop for the latest trends and conditions in the commercial/multifamily real estate finance industry," Woodwell said.

MBA Commercial/Multifamily NewsLink readers can click MBA DataLink’s logo, premiering January 4, for the most up-to-date information of MBA Research DataLink .

MBA Research DataLink is a free service for MBA’s membership and all MBA Commercial/Multifamily NewsLink readers. For more information, e-mail Melissa Rawak at mrawak@mortgagebankers.org or call (202) 557-2875.
(Back To Top)

The property, near Buffalo, is the newest public golf course in the region. It is primarily agricultural in nature with residential development interspersed in the area. The five-year, fixed-rate loan, arranged by Account Executive Michael Lorigo through StanCorp Mortgage Investors, San Francisco, has a 15-year amortization schedule.

Lorigo also arranged first mortgage financing of $875,000 on Country Falls Apartments through Column Financial, a subsidiary of Credit Suisse First Boston , New York. The 32-unit multifamily property, located in the Finger Lakes region of Montour Falls, N.Y., has a 10-year, fixed-rate loan. Its location is near more than 80 wineries.

Meanwhile, StanCorp Mortgage Investors provided a $1.75 million, 10-year fixed-rate loan with a 25-year amortization on a 60,000 square foot retail/office building in Irondequoit, N.Y., a suburb of Rochester. The building, surrounded by residential developments, is on a major commercial retail corridor near Rochester General Hospital, according to Frank Giacobbe, account executive at Largo Real Estate, who arranged the financing.

Jack Phillips, principal for Largo Real Estate Advisors, arranged $4 million on two Class A office/flex buildings located within Quaker Centre Industrial Park in Orchard Park, N.Y. With nearly 700,000 square feet of commercial space between both buildings, 4 Centre Drive has 48,640 square feet of space and the other office building, 40 Centre Drive, consists of 51,189 square feet.

The 10-year, fixed-rate loan through RiverSource Investments LLC has a 25-year amortization. The borrower, The Krog Corp., Orchard Park, owns nearly one million industrial and office properties throughout western New York. This property’s main tenants include Malcolm Pirnie, Belting and IntelliSensing and Sampla.

Phillips also secured first mortgage financing of $18 million on Springhill Suites Hotel in Tarrytown, N.Y. The borrowing entity consists of 50 percent ownership by The Widewaters Group and New Castle Hotels and Resorts. The 10-year, fixed rate loan through PPM/ Jackson National Life Insurance Co., Chicago, has a 25-year amortization.

Springhill Suites Hotel, built in 2003, includes 145 studio suites, near several large office parks, housing many corporate headquarters, including Xerox, Fugi and Bayer. The hotel is one mile from the Tappan Zee Bridge adjacent to Tarrytown Corporate Center.
(Back To Top)

Last week, the House passed a bill to extend the Terrorism Risk Insurance Act (TRIA) for two years. The House took up the Senate bill, S. 467, which passed on November 18, struck its language, and inserted a modified version of H.R. 4314, the House TRIA bill. The Senate will not accept this change, as the two chambers' bills are significantly different. A conference committee continues toward a resolution in the differences this week.

The White House on Thursday issued a Statement of Administration Policy strongly opposing the House-passed bill.  That fact, coupled with the fact that political parties, the Senate and the White House carefully negotiated the Senate bill, leads the Mortgage Bankers Association to believe that the final conference product will look more like the Senate bill than the House bill. 

MBA and its industry partners are concerned with the way in which one aspect of the Senate bill is drafted as it would cause what we believe to be unintended damage to the "make available" provision of TRIA.  In S. 467, the Secretary of the Treasury, in concurrence with the Secretary of State and Attorney General, is not allowed to "certify" a terrorist event until it reaches a level of $50 million in total insurance losses in 2006 or $100 million in total insurance losses in 2007. 

This means that terrorist events under these threshold levels cannot be "certified" as terrorist events, and as such makes claims ineligible for payment with the way policies are currently written.  This is because insurers would only pay out on claims when and event is certified and the TRIA backstop is triggered, which is $5 million under current law but would become much higher ($50 million in 2006 and $100 million in 2007) under the renewed TRIA. 

MBA continues to work with Coalition to Insurance Against Terrorism (CIAT) as well as directly with members of Congress, Treasury officials and the National Association of Insurance Commissioners (NAIC) to resolve this issue and effectively preserve "make available" in the final bill. 

For more information, please contact Josh Denney at (202) 557-2816 (jdenney@mortgagebankers.org).

MBA Delegation Surveys Damage from Hurricane Katrina
Earlier this week, MBA Chairman Regina Lowrie, CMB, and Vice Chair Kieran Quinn, accompanied by MBA and other industry staff, traveled to New Orleans to tour the damage wrought by Hurricane Katrina and its aftermath. With the initial 90-day period since the storm coming to a close, and numerous public policy issues still to be addressed, Lowrie and Quinn thought it was important to see the damage firsthand. 

They both report that while many of us feel we have a sense for the scale of destruction, it is very difficult to comprehend without viewing it in person.  The issues that arise out of this tragedy will remain with us on a public policy level for a long time.  Our customers, of course, continue to be faced with re-building their lives with many questions (when will schools re-open, is my job coming back, what will they do with the levees, etc.) still unanswered.

For more information, please contact Francis Creighton at (202) 557-2736 (fcreighton@mortgagebankers.org).

Status of FASB's Servicing Rights Project
The Financial Accounting Standards Board (FASB)  Statement on accounting for transfers of financial assets is now slotted for release in the second quarter of 2006.

The Board reached a number of very favorable decisions relating to accounting for servicing rights during its meeting on November 16. In fact, the Board was very responsive to feedback received on the Exposure Draft, including agreeing to change the guidance to permit a fair value election based on an entity's risk management approach rather than a class of assets approach.

We should expect to see an Exposure Draft, with a 75-day comment period, during the first quarter of 2006.

For more information, please contact Alison Utermohlen at (202) 557-2864 (autermohlen@mortgagebankers.org).
(Back To Top)

General Committee News

10:00 a.m. – 11:30 a.m.
Multifamily Housing Committee
2:00 p.m. – 3:00 p.m .
Loan Origination Committee Capital Markets Committee

Please plan to attend a special session at this year’s Convention:  MBA 101 or Get up! Get Out! Get Going! on Sunday, February 5, from 8:00 am to 9:00 am.  The session introduces the committee process and the events of the CREF Convention to first time attendees and those who want to know how to be more involved in MBA’s activities.  This session is hosted by a graduate of the MBA Future Leaders Program and representatives from the commercial/multifamily committees. 

For information and registration for CREF 2006, please go to http://events.mortgagebankers.org/cref2006/default.html.

For additional information on any of MBA’s commercial/multifamily committees, including an online sign-up form, please go to http://www.mortgagebankers.org/cref/about/committees.html.

COMBOG: The next meeting of the COMBOG will take place at the MBA Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2006, on February 5 from 3:30 pm to 6:00 pm in Orlando. The COMBOG meeting is limited in attendance to Board members only.

Asset Administration: On December 1, the COMBOG’s Asset Administration Committee’s SEC Asset-Backed Securities (ABS) Working Group released its White Paper, U.S. Securities and Exchange Commission’s Regulation of Asset-Backed Securities: Interpretive Guidance on Regulated Disclosure for CMBS Servicing, for use by the industry. A companion memorandum entitled Impact on CMBS Servicing Regulation, Disclosure and Reporting, also released December 1, provides a non-interpretive overview of the entire SEC Regulation on Asset-Backed Securities. The memorandum was a joint effort between MBA and the law firm of Akin Gump Strauss Hauer & Feld LLP. Both documents can be found on MBA’s website at http://www.mortgagebankers.org/news/2005/pr1201.html.

MBA continues to serve in a lead role in interpreting this complex regulation. The resultant White Paper is to serve as an informational resource guide to servicer disclosure requirements as outlined in the regulation. It is aimed specifically at all CMBS industry participants and parties to public transactions. The paper is for the industry as a resource as companies meet the January 1, 2006 deadline for full compliance with the new regulation.

MBA offers special thanks to the members of the Reg AB Working Group, the Working Group’s Chair, Kathy Marquardt of GMAC Commercial Holding Corp., Horsham, Pa., and to Keith Dunsmore, attorney at the Washington, D.C. law firm of Akin Gump Strauss Hauer & Feld LLP , who drafted the non-interpretive memorandum.

The Asset Administration Committee continues to assist MBA members in addressing the serious business issues created in the aftermath of the recent hurricane season. Several conference calls have been held, focusing on servicer concerns related to hurricane damage. Regular calls will continue throughout the year to provide servicers an open forum for information exchange.

MBA's Commercial/ Multifamily Hurricane Resource Center updates regularly as new information and useful links are identified. The Resource Center can be found at http://www.mortgagebankers.org/resources/katrina/cref_mf.html and includes such items as contact information for insurance companies nationwide and weblinks to official government resources.

Capital Markets: MBA staff is working in conjunction with the Commercial Mortgage Securities Association (CMSA) Q Status Task Force, a group that includes the American Securitization Forum (an affiliate of the Bond Market Association), the Real Estate Roundtable, and the CMSA . The Task Force has been focusing on the Q status issue as it relates to CMBS and compliance with Financial Accounting Standards (FAS) 140. The CMBS industry is in compliance with the FAS 140 requirements, but several accounting firms have raised questions that center around the amount of permissible discretion a servicer can have when it services complex financial assets, such as commercial mortgage loans.

For the past several months, the Task Force has been coordinating industry response to questions about the application of FAS 140 to CMBS. The Financial Accounting Standards Board (FASB) will likely make a decision before the end of the year about taking on a new project to directly address these issues. Any radical re-interpretation of the existing accounting literature would seriously disrupt the commercial real estate industry’s access to funding through the capital markets.

Education Committee: Plan to attend the Certified Mortgage Banker (CMB) Graduation Ceremony, Reception and Open House at the CREF Convention in Orlando where 25 commercial members are expected to receive the coveted commercial CMB designation. The event takes place on Monday, February 6, at 4:30 pm.

Work continues on development and implementation of the Multifamily Property Inspection course which will be offered in Las Vegas and Washington, D.C., in March 2006. Campus MBA, MBA’s educational arm, is also preparing for the second offering of the Commercial School of Mortgage Banking, March 5-10, 2006 in Miami, and the first offering of Commercial Loan Origination 101, January 22-23, 2006 in San Francisco, Calif.

International: Plan to attend the International Reception at the CREF Convention on Tuesday, February 7 from 4:30 pm to 6:00 pm. The Committee’s first call and meeting will take place in January and February 2006, respectively.

Legislative Committee: The committee continues to monitor and advise on MBA’s most pressing legislative and advocacy issues, including the extension of the Terrorism Risk Insurance Act (TRIA), GSE reform, and modernization of the Real Estate Mortgage Investment Conduit (REMIC) laws.

On November 18 and December 7, respectively, the Senate and House passed legislation that would extend TRIA for two years. The two bills have significant differences and the White House has indicated that it does not support the House version of the bill and is lobbying strongly for the more limited Senate TRIA legislation. While it is unlikely that there will be a formal House-Senate conference of this legislation, the Senate Banking Committee and House Financial Services Committee are working through other procedural channels to come to an agreement and enact TRIA legislation before Congress adjourns for the year.

Talks have been difficult, however, and a positive outcome is not guaranteed. Congress will attempt to adjourn this week, but it is looking more and more likely that it will remain in session until closer to the end of next week.

MBA and its industry partners are concerned with one aspect of the Senate bill as it could cause unintended damage to the "make available" provision of TRIA. Because of technical issues with how the government would certify a terrorist event in the Senate version, events under $50 million would not have to be covered by private insurance companies and would not be subject to the federal reinsurance program.

In 2007, this level increases to terrorist events under $100 million. The MBA proposes a change in the Senate legislation that would require private insurance companies to provide coverage for terrorist events under $50 million in 2006 and under $100 million in 2007. MBA continues to work with the Coalition to Insure Against Terrorism (CIAT) as well as directly with members of Congress, Treasury officials and the National Association of Insurance Commissioners (NAIC) to resolve this issue and effectively preserve "make available" in the final bill and close these coverage gaps.

Loan Origination: The Loan Origination Committee’s Seismic Working Group conducted an industry questionnaire on seismic risk assessment. The Working Group developed two separate questionnaires, one for lenders/investors and the other for consultants, on the current methods used to assess seismic risk in commercial/multifamily properties.

A general overview of the results of the survey was made available in MBA’s Commercial/Multifamily NewsLink in early December 2006. This survey was done to assist in developing a comprehensive user’s guide to seismic standards slated for release late next year, which we hope will assist members in underwriting earthquake risk.

In the aftermath of the hurricanes on the Gulf Coast, a useful resource for member companies is MBA’s recently released White Paper on mold entitled Mold: Steps toward Clarity. The white paper is available via the web at: http://www.mortgagebankers.org/cref/WhitePaper/PDF/Mold%20White%20Paper%20-%20FINAL.pdf.

Mortgage Banking: Planning is underway for the scheduling of monthly telephone meetings of the Mortgage Banking Committee and a new schedule for 2006 is forthcoming. The Committee may address state licensing issues and equity registration requirements.

Of special interest to mortgage bankers at the CREF Convention 2006 are several panels including “Mortgage Banker Today – Mortgage Banker Tomorrow?” a look at the role of the mortgage banker in a hyper-capitalized market; “Small Loans are Big”, a discussion of small balance commercial/multifamily lending; and our annual borrower’s panel “Borrower Issues and Perspectives,” which provides a chance for lenders to hear from actual users of capital about their issues, both pre- and post-closing.

Multifamily Committee: The committee hosted an FHA Servicers Roundtable on November 29 at MBA’s offices in Washington, DC with 28 members and 13 HUD staff members.

Several panel discussions are planned for the CREF Convention addressing Multifamily issues, including:  “Frothy” Multifamily Debt Markets?  How to Survive and Thrive,” a reprise of last year’s successful panel moderated by Shekar Narasimhan; an opportunity to hear industry experts sort through the multitude of issues found in preserving affordable housing at “Financing Affordable Housing – Learning About Layering”; a look at three product types getting renewed attention at “Niche Multifamily Markets – Challenges and Opportunities” and an opportunity to hear what’s new at FHA at “New Faces, New Direction at FHA.”

Portfolio Investors: The 2006 CREF Convention will feature panel discussions of interest to the portfolio investor including “Portfolio Lending: Is the Glass Half Full?" where the panel will forecast possible future scenarios for the portfolio lender as a source of capital and the unique challenges, opportunities and obstacles in the lender/borrower relationship. Planning is underway for the Committee’s first telephone and in-person meetings in January and February 2006, as well as for the next round of Portfolio Investors Regional Roundtables.

Research Committee: In the first quarter of 2006, MBA will begin publishing a new quarterly newsletter online based on the Committee’s Commercial Real Estate/Multifamily Finance Quarterly Data Book. MBA Research DataLink will consolidate research articles and statistics from the Quarterly Data Book and other sources to focus on the latest trends in the commercial real estate/multifamily finance industry. MBA Research DataLink is a free service for MBA’s membership. For more information, e-mail Melissa Rawak at mrawak@mortgagebankers.org or call (202) 557-2875.

MBA’s Commercial/Multifamily Research Committee held its 2006 kick off conference call on November 16. Discussion topics included: an update on ongoing and "in-development" MBA commercial/multifamily research efforts; review of a draft survey to gauge research priorities of the MBA commercial/multifamily leadership; and planning for the Committee's year ahead, including the Research Committee meeting the morning of Sunday, February 5 at the CREF Convention. To join MBA’s Research Committee visit http://www.mortgagebankers.org/cref/about/join.html. To find out more about the Committee and/or MBA’s research, contact Jamie Woodwell at jwoodwell@mortgagebankers.org.

Technology Initiatives: The Commercial Servicing Workgroup of MBA’s data standards subsidiary, MISMO (The Mortgage Industry Standards Maintenance Organization) voted to approve the draft Logical Data Dictionary for its Servicing Transfer Standard. This first commercial standard is slated for release at the CREF Convention in February 2006. The final standard will facilitate the movement of information when loan servicing rights are transfer between trading partners. The standards are broadly aimed at all firms that acquire or place servicing, regardless of industry sector.

The draft dictionary is available for download on the commercial page of the MISMO web site at http://www.mismo.org/cMISMO/cmismohome.html. For further details, please contact Dan Szparaga at dszparaga@mortgagebankers.org.

Plan to attend "MISMO, MISMO, MISMO," a panel discussion at the CREF Convention, for a jargon-free, bottom line presentation on the latest information on how you can benefit from MISMO’s commercial standards.
(Back To Top)

MBA Research Survey Available Online
MBA (12/15/2005) Woodwell, Jamie

Help MBA's Commercial/Multifamily Research Committee better understand the research needs and priorities of MBA members by taking two minutes to complete an online survey. Click here to access the survey.  Surveys will be available until December 21.

The Research Committee will use the feedback and comments received to help ensure that MBA's research is adding value to the industry and to MBA members.

If you have any questions, please do not hesitate to contact Jamie Woodwell, MBA's Senior Director of Commercial/Multifamily Research at jwoodwell@mortgagebankers.org.
(Back To Top)

Future Leaders Deadline on December 31
MBA (12/15/2005) Logan, Leah

The Mortgage Bankers Association is accepting applications for its Future Leaders Class of 2006. the application deadline is December 31.

Each year, MBA’s Future Leaders program delivers a highly regarded curriculum focusing on leadership and business management skills for the industry’s most promising professionals. Members of the Class of 2006 will participate in a series of three sessions throughout the year and will:

• Get a strategic perspective of the future of the mortgage industry delivered by industry leaders;

• Learn about the federal legislative process and meet with their elected representatives in Congress at MBA’s National Policy Conference;

• Working in teams, develop a holistic approach to community economic development and its impact on housing and commercial development for presentation to economic development experts; and

• Graduate at MBA’s 93rd Annual Convention and join a national network of professionals dedicated to the real estate finance industry.

Participants are selected based upon their professional and academic achievements and the recommendations of their company president or chief executive officer. Additional recommendations are encouraged.  To be considered, applicants must be:

• Real estate finance professionals with 3-15 years of experience;

• Full-time employees of Regular or Associate MBA member firms or adjunct state associations; and

• Individuals that have demonstrated a commitment to a career in real estate finance through professional excellence and achievement

The tentative schedule of events:

Leadership Development & the Federal Legislative Process—held in conjunction with MBA’s National Policy Conference, March 19–22, 2006 in Washington, D.C.

Economic Development Session—July 2006, dates & location to be announced in December.

Closing Session and Graduation Ceremony—held in conjunction with MBA’s 93rd Annual Convention, October 22-25, 2006 in Chicago.

Tuition for the program is $2,500 per person and is payable upon acceptance into the program. Participants are also responsible for travel and accommodations related to each session. Because peer learning is an integral component of the curriculum, participants should commit to attend each session. To download an application, visit http://www.mortgagebankers.org/future_leaders/index.html. 

If you have questions or would like additional information, please contact Leah Logan, senior director of membership, at (202) 557-2752 (llogan@mortgagebankers.org).
(Back To Top)

Magoffin is president and CEO of Q10|Dwyer-Curlett & Co ., one of the leading commercial real estate finance firms in the country that services a loan portfolio in excess of $2.5 billion for life insurance companies and other institutional lenders. During her 25+ year career she has been involved in the origination, structuring and financing of all types of income producing real estate.

As a member of the Commercial Real Estate/Multifamily Finance Board of Governors (COMBOG) for the Mortgage Bankers Association, Magoffin sits on the Board of Directors for the California Mortgage Bankers Association. She is a licensed real estate broker in California, as well as a CMB and Chartered Realty Investor (CRI). She has been named four times as one of the most influential women in real estate in Southern California by Real Estate Southern California magazine.

“CampusMBA staff recruited me to become a [CMB] candidate, and I accepted the challenge as I believe that it is my responsibility as a leader in the industry to serve as an example to others. Earning the designation gave me a great sense of personal accomplishment,” said the two-year CMB veteran.

When asked what advice she has for those interested in the CMB designation, Magoffin said, “Pursue the CMB. Earning the designation is challenging, but the feeling of pride and accomplishment is tremendous. Those who have earned the CMB earn respect in our industry.”

Join industry leaders like Magoffin in earning the pinnacle of mortgage banking excellence – the Certified Mortgage Banker. Get your points evaluated, take your written and oral exams, and graduate with your peers at MBA’s 2006 Commercial Real Estate Finance/Multifamily Housing Convention in Orlando.

Contact Jennifer Ridings at (202) 557-2763 or jridings@mortgagebankers.org, or Alicia Willey at (202) 557-2766 or awilley@mortgagebankers.org, today to get started on your CMB. To learn more, visit www.campusmba.org/cmb.
(Back To Top)

“In 2005, [the capital markets] basically tried to push the envelope to make ourselves look more competitive to life companies. The life companies still have some edges on us. One of the edges they always have is dealing with reserves [and] dealing with servicer issues,” said Michael Magner, managing director at IXIS Real Estate Capital, New York, speaking at the RealShare Northern Virginia conference in Tysons Corner, Va. “A lot of our documents have [now] been wired to help us with servicer issues so that things are being improved with [response to] ROIs [return on investments]. I think our reserve structure has been a lot more flexible…there is this trend in 2005 to push the envelope on the capital markets side to make it a little more attractive to the buyer.”

“Right now, borrowers have more options than they ever had before,” said Roger Cozzi, executive vice president of investments at iStar Financial Inc., New York. “Documents clearly are becoming more flexible. I question whether that is the result of liquidity in the market with lenders who want to do deals. I don’t know if that is a long-term or short-term thing. I think servicing is clearly a way that balance sheet lenders [i.e. life insurance companies and portfolio lenders] differentiate themselves.”

Cozzi said more than documentation, newer products are helping the capital markets to bring in borrowers. He said mezzanine lenders that once had an advantage in product types find that construction and condominium conversion deals are moving into securitization, two types of deals that have never been securitized before.

“The area that is the most intriguing from the borrower’s perspective is just tighter products securing finance right now,” Cozzi said.

“We are seeing for the first time that CMBS is really a fixed rate product,” said Sandor Biderman, director in the Washington, D.C. office of Wachovia Securities, Charlotte, N.C. “This is about liquidity.”

Magner predicts that borrowers in 2006 will take on investment opportunities in properties that they think will stabilize in five or six months, rather than simply chase capital on properties with less risk. “It will take a big response, but I think that is one way that capital and price compression will take place in 2006,” Magner said.

With the amount of capital in fixed-rate products, Biderman forecasts more price compression on floating rate and mezzanine products. “It’s an awesome time to be a borrower,” Biderman said.
(Back To Top)