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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (210769)	7/16/2009 10:31:30 AM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

wonder how many 'investors' are still afraid to open up their brokerage statement....

To: Giordano Bruno who wrote (210769)	7/16/2009 1:35:11 PM
From: MulhollandDrive	Read Replies (2) \| Respond to of 306849

hey look! more heads in the sand (aka, extend and pretend): Commercial Mortgage Bond Market Stays Shut Amid U.S. Program July 16 (Bloomberg) -- There will probably be no new debt sold under the U.S. government’s program to jumpstart commercial real-estate lending this month, marking the second monthly round in which the plan to revive the market for bonds backed by hotels, shopping malls and offices has failed to produce sales. While there will likely be no new issuance for July, new deals should materialize by October, Alan Todd, an analyst at JPMorgan Chase & Co., said in a telephone interview. The Federal Reserve’s effort to breathe life into the $700 billion commercial mortgage-backed bond market is hampered as lenders balk at originating new loans with no way to guard against price swings on the debt. Building a pipeline of commercial mortgages to bundle and sell as securities takes several months, and banks are unwilling to risk holding them on their books without a means to protect themselves from price declines, according to Christopher Hoeffel, a managing director at Investcorp International Inc. in New York. “The problem needs to be solved to restart the market,” Hoeffel said in a phone interview. “The government efforts are commendable, but they don’t get us all the way there.” Investors were able to get loans from Fed’s Term Asset- Backed Securities Loan Facility starting in June to purchase newly issued commercial mortgage-backed bonds. There were no sales under the program last month. The Fed will announce later today how much it received in loan requests to purchase the debt for July, the first month investors could get loans to purchase older securities backed by commercial mortgage-backed bonds. ‘Head in the Sand’ Reluctant lenders aren’t the only ones holding up new issuance, according to Dan Gorczycki, a managing director of Savills, a real-estate investment banking firm based in New York. Loan servicers are increasingly giving extensions to borrowers in hopes conditions will improve, bringing activity to a standstill and damping the demand for new loans, Gorczycki said. “Everybody has got their head in the sand,” Gorczycki said in an interview. Generating new loans and averting a wave of foreclosures as borrowers fail to refinance maturing commercial mortgages is a cornerstone of the Fed’s effort to cleanse bank balance sheets and enable lending. Two-thirds of loans bundled and sold as securities, or about $410 billion, may have trouble refinancing maturing debt, according to Richard Parkus, a Deutsche Bank AG analyst. Sales of commercial mortgage-backed bonds plummeted as the cost to sell the bonds became too high to originate new loans, choking off financing to borrowers. A record $237 billion in commercial mortgage-backed debt was sold in 2007, compared with $12.2 billion last year, according to JPMorgan. There have been no sales so far in 2009. To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net Last Updated: July 16, 2009 12:01 EDT bloomberg.com.