Six roundtables are scheduled; future Washington roundtables will take place July 28 and August 18. Additionally, three field sessions will take place July 21 in Los Angeles; August 4 in Chicago and August 11 in Fort Worth, Texas.

MBA NewsLink will provide coverage of today’s roundtable.
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Before joining CMG in August 2004 as the national director of retail production, Binkley started on the ground floor of the mortgage business in 1992. Between 1993 and 2000, he became an owner at Reliance Home Mortgage in Houston and worked in a variety of roles as an originator, trainer and speaker. In 2001, Binkley was a sales manager with Professional Mortgage Alliance in Denver, where he was responsible for the day-to-day management, training and marketing of 32 loan officers.

American Guardian Home Loans, Lake Forest, Calif., appointed Daniel Huss as vice president of operations. Huss is responsible for overseeing daily operations of the company’s mortgage lending platform; additionally, he assists in development of policies and procedures to serve American Guardian’s broker network.

Huss has more than 15 years of sales and management experience in the mortgage industry. Prior to joining American Guardian, he worked as assistant vice president and operations manager for Mortgage Select in Laguna Hills, Calif. Huss was also assistant vice president and branch operations manager at Headlands Mortgage Co. (currently Greenpoint Mortgage), in Santa Ana, Calif. 

Sperry Van Ness, Irvine, Calif., expanded in the Northern Colorado commercial real estate market by naming Tom Howard as senior advisor.  His office is located in Fort Collins, Colo.

With 20 years of commercial real estate experience, Howard specializes in the sale and lease of commercial properties. Prior to joining Sperry Van Ness, Howard served as a business development manager for Hall-Irwin, a Northern Colorado real estate construction company. Previously, Howard was the South and Latin American real estate manager for the Hewlett-Packard Co.

Sperry Van Ness also announced its expansion in the Philadelphia commercial real estate market by naming Mark Berk as senior advisor.

With 30 years of commercial real estate experience, Berk specializes in the sale of income producing properties. Prior to joining Sperry Van Ness, Berk served as senior vice president for Albert M. Greenfield & Co. Inc. Commercial Real Estate, where he was responsible for investment sales nationwide.

Bulls Capital Partners LLC, Vienna, Va., hired Patrick McMahon as senior vice president and senior deputy chief underwriter and Andrew Ellis as vice president of underwriting and production.

McMahon is responsible for management of the underwriting department, oversight of loan pricing and sizing and the underwriting and delivery of loans for Fannie Mae purchase. His 30 years of experience in commercial mortgage underwriting include posts as senior underwriter and vice president at Prudential Mortgage Capital Co. and as senior underwriter at Reilly Mortgage.

Ellis has 12 years of real estate finance experience. Prior to joining Bulls Capital Partners, he served as loan officer at Meridian Capital Group LLC. Previously, he was an underwriter at AMI Capital/Wachovia Multifamily Capital Markets.

Realty Data Corp., Garden City, N.Y., appointed Jamie Giorello as business development strategist and sales executive.

Giorello comes to RDC with 10 years of sales experience in the field of automated databases. She was a sales executive with Zenodata Corp. for the past two years. Prior to that, she was a national account representative with LandAmerica Financial Group for eight years, spending two years of that period with the company’s online property information service, RapidTract. She also has experience with a large real estate brokerage and has worked directly with the settlement and closing process.
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The majority, 93 percent, of respondents thought the site of the former World Trade Center should be used for both a memorial and commercial office space. Respondents also weighed in on whether the design of an appropriate memorial would be a factor in leasing space—49 percent said yes, 32 percent said no and 19 percent were unsure if it is a factor.

Most respondents, 82 percent, said that the current real estate market would support redevelopment of the World Trade Center site. The survey also found 36 percent of the respondents plan on increasing the net amount of office space they currently occupy.

The majority of companies said they are planning to maintain or increase occupancy over the next six months. Thirty-six percent are planning a net increase for space occupied, 15 percent are planning a net decrease and 50 percent are maintaining the same levels of office space occupancy. More than 70 percent of respondents were planning to maintain the same levels of industrial space, while 11 percent were planning a net increase in industrial space and 11 percent a net decrease.

The survey was conducted June 6 through June 30 with 136 responses. Fifty percent of respondents had a portfolio of fewer than 1.5 million square feet, 24 percent had a portfolio between 1.5 million and 10 million square feet, 14 percent had a portfolio greater than 10 million but less than 30 million square feet, and about 10 percent had a portfolio greater than 30 million square feet.
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“Collateral was able to underwrite the affordability restrictions of the community which set aside 20 percent of the units to those residents earning 50 percent of AMI [area median income], along with 75 percent of the units to residents earning 80 percent of AMI,” said Colin Whittier, senior real estate analyst.

Cost concerns and an expiring bridge loan were two challenges Collateral faced on the deal but overcame them by adjusting the structure of the deal from a Fannie Mae Credit Enhanced Bond financing to a Fannie Mae Convertible ARM.

The note rate is based on floating rate over one-month LIBOR, with a loan-to-value of 75.78 percent and a DSCR of 1.29x. The deal carries a 10-year term, with one-year interest-only, and a 29-year amortization period.

Amenities to the 12-acre, 321-unit community include built-in computer desks and bookshelves, garden tubs, crown molding, built-in wine racks, full-size washer/dryer connections and ceiling fans. The outside has patio/balconies with outside storage. Select units feature vaulted ceilings and fireplaces.
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For additional information please contact Beth Percynski at 202-557-2866 or bpercynski@mortgagebankers.org. This call is open to MBA members only and is closed to the media.
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Treasury Secretary John Snow appeared before the House Financial Services Committee. He told  the committee that the Treasury report confirmed that TRIA was “well-designed and its goals well-achieved” but that the market has developed into a “further state of maturation and development in which the private sector can take on a greater role” in accommodating the risks of terrorism insurance.”

“We’re encouraged that the private sector will continue to expand, and the role of the government and the taxpayer can recede,” Snow said.

The hearing comes in the wake of a series of terrorist attacks in London that targeted the city’s transportation infrastructure. More than 50 people were killed. It also comes as a USA Today poll found that 55 percent of Americans believe that a terrorist attack could occur in the U.S. within the next three weeks.

Snow said that TRIA was intended to be a “temporary” solution. “The report finds that TRIA has been effective in meeting its goals of supporting the industry during a transitional period and stabilizing the private insurance market,” he said. “Consistent with TRIA’s design to encourage the development of the private market, the Administration opposes a straight extension of the program. Extending TRIA in its current form is likely to discourage the private market development needed to deal with the risk of terrorism. The Administration has outlined principles that any extension should recognize and we look forward to discussions with the Congress on them.

While committee chairman Michael Oxley, R-Ohio, and Capital Markets subcommittee chairman Richard Baker, R-La., expressed cautious support for Snow’s comments, committee Democrats sounded deeper concerns. The committee’s ranking Democrat, Rep. Barney Frank, D-Mass., said the market was still to unstable for the federal government to pull back at this time.

“There are buildings out there that would suffer greatly without a federal backstop for terrorism insurance. We have to move quickly,” Frank said. “We need to give people out there who are building the assurance that this program will remain in place.”

Oxley said that he felt an “enormous responsibility” to move forward with a bill this year. “At the end of the day, this chairman is going to deliver a bill, and we’ll work with the Treasury and anyone else who has a stake in this. Anything else would be a big mistake,” he said.

In the letters to the Hill, MBA Chairman Michael Petrie, CMB, noted that MBA members bear the “lion’s share of the financial risk associated with property damage or destruction”—the single largest share of real estate outstanding in all markets.

“The members of MBA provide over 70 percent of the nation’s residential mortgages and the vast majority of its commercial mortgages,” Petrie said. “TRIA’s effect is therefore a crucial issue for MBA’s members, especially commercial mortgage servicers whose function includes receipt of payments, customer service, escrow administration, investor accounting, collections, foreclosures as well as ensuring that properties have necessary insurance coverage in place. Mortgage lenders typically place debt in an amount equivalent to 80 percent of the property’s value while the owner’s share is limited to a 20 percent equity position. As a result, the greatest risk for property and casualty events is effectively absorbed by the commercial real estate finance industry.

Petrie reminded the Hill leaders that following the terrorist attacks of September 11, 2001, insurance coverage for potential losses from terrorism was largely unavailable and, when available, extremely expensive and often inadequate.

“MBA stood with the Congress and President Bush to pass TRIA in November 2002. The need for TRIA was compelling then and continues to be now,” Petrie said. “Terrorism insurance is a necessary component in today’s society evidenced by the fact that a majority of our members require legal documents to provide for coverage when closing commercial mortgage transactions. This required coverage assures marketplace stability and continuity for the commercial real estate finance industry. TRIA and terrorism insurance are essential to defending America against the physical and economic consequences of an attack.

In the spring of 2004, MBA released a study on TRIA which demonstrated that terrorism coverage is both widely required and, because of TRIA, widely available. MBA surveyed loan administrators who serviced more than $656 billion of the then-$2 trillion in commercial real estate debt outstanding. The survey showed that 94 percent of that $656 billion required terrorism insurance. It also found that 84 percent had terrorism insurance in place. The 10 percent of commercial/multifamily debt for which terrorism insurance is required, but was not in place, included properties for which the servicer and borrower were working to place coverage, properties for which the requirements have been waived and some properties that may have “all-risk” coverage that have been deemed to include terrorism coverage, but for which an explicit statement of terrorism coverage does not exist.

Federal Reserve Chairman Alan Greenspan noticed this spring that there exists “regrettable instances in which markets do not work, cannot work. I have yet to be convinced that the terrorism insurance market can be made to work.”

Petrie said that MBA “does not believe the private market is currently prepared to provide an adequate supply of affordable terrorism insurance and reinsurance without government involvement. TRIA must be extended. The failure to extend TRIA in the short term, to permit more time for the development of a thoughtful long term solution, could result in significant breakdowns in the commercial real estate finance industry and other markets. When commercial insurance carriers excluded terrorism insurance coverage prior to TRIA’s enactment, the risk of a catastrophic terrorism loss shifted from the commercial insurance industry to the commercial real estate finance industry.”

For this reason, Petrie continued, lenders and loan servicers who bear a fiduciary responsibility, as described in transaction legal documents, to investors and funding sources, have the greatest “standing” among all industries in assuring broad availability and affordability of terrorism insurance.

“Commercial real estate lenders and their servicing firms are likely to experience operational difficulties with regard to their existing portfolios if TRIA is not extended,” he said. “The extension of TRIA is needed urgently, well before its December 31, 2005 expiration date. To do less would be to compromise our vigilance against terrorism, to cast a shadow across America’s economic stability, and to fail to secure our nation against the physical and economic consequences of another attack. Congress must act now to provide certainty that terrorism insurance will be available into next year."

The Senate Banking Committee holds a similar hearing today at 10:00 a.m. EDT. Snow is scheduled to appear before that committee as well.
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