The three deals will total $4 billion. The securitizations will be backed by an FDIC guarantee, according to Dow Jones. A call to FDIC was not returned in time for publication.
It is unclear what impact FDIC will have as it steps into the distressed market with these deals. Its primary mission, of course, is to get the best deal for taxpayers. The private sector, however, worries that FDIC may drive up distressed asset valuations--which have been perceived to be too high to begin to move. At the same time, however, FDIC could also introduce a welcome note of transparency into pricing with these deals.
"The FDIC has a lot of product, which is unfortunate for the system, but it's important to get really close to valuations that people will acknowledge as accurate," Patrick Sargent, a partner in the Dallas offices of Andrews Kurth LLP, and president of the Commercial Mortgage Securities Association, told GlobeSt.com in an earlier interview.
"We're seeing widely varying appraisal amounts," he said. "We've got to get 'price discovery' in order to find out where valuations really are. Once people are comfortable with that, there are many investors on the sidelines waiting for what they perceive to be the bottom and valuations that they can justify."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
