Roundtable: Bullish on TALF

TALF--the Term Asset-Backed Securities Loan Facility--is now underway--in fact the New York Fed has decided to extend the subscription period for funding by two days. DeBoer is "very bullish" on TALF and the impact it will have on lending and credit. The Roundtable has been--and still is--engaged in "very constructive conversations" with the Fed and Treasury on making changes that will assist CRE. For instance, a big concern is the three-year financing term in TALF. Most CRE loans are five years minimum. The Roundtable would like to see TALF reflect that.

The details of another government program--the Public Private Partnership Fund, so so-called Bad Bank--are expected to be revealed in the next few days by the Treasury Department. DeBoer had less information to provide about that, except to say that it is likely to be "a few funds" set up which will bid against each other for the assets. It will be Treasury's road show though; DeBoer did not have details to share on the funds' nuts and bolts that are key to execution.

DeBoer also pointed to the Cancellation of Debt provision in the stimulus bill, which will provide some relief to CRE borrowers and which he described as "very stimulating" for CRE. The stimulus bill allows commercial loan borrowers to defer the tax for five years. Otherwise, renegotiated or forgiven loans would be immediately taxed as ordinary income.

Negotiations to relax mark-to-market rules, though, have not been a fruitful, he said. The SEC and FASB are considering this admittedly controversial move, putting out for comment a proposal that would redefine what a market with no activity should be. The changes and momentum are not as strong as DeBoer would like to see--at least compared with actions taken by the Fed and Treasury--but, he said, "at least they are moving in the right direction."