Everyone I talk to says the key to real estate market recoveryis resuscitating the CMBS markets. There´s plenty of equity "on thesidelines," but without credit and refinancing sources, the capitalmarkets will stay frozen. Ironically, the CMBS concept helped jumpstart market recovery 15 years ago, bringing new sources of capitalinto property sectors when banks and insurance companies werereeling from a prodigious round of poor-underwriting induced redink. Now the moribund CMBS market hamstrings prospects for anear-term turnaround.
A year after TARP was enacted, the U.S. Treasury Departmentfinally puts in place a scaled down program to help banks unloadtroubled mortgage securities. The Feds will match investments andprovide a credit facility for big investment banks and theirclients to buy problematic CMBS at significant discounts.
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