WASHINGTON, DC-The Senate Committee on Banking, Housing &Urban Affairs held a hearing on the state of the securitizationmarkets. Testifying to the committee was Lisa Pendergast, presidentof the CRE Finance Council. Her message was succinct and blunt:please take care in crafting the rules that will implementDodd-Frank, as they could have a detrimental impact on the buddingCMBS market.

Yes, she noted, there is $35 billion in CMBS expected to beissued this year, compared to $12 billion last year. That, though,is still minuscule compared to the $240 billion issued in 2007.More to the point, Congress could inadvertently render the CMBSmarket unviable if they do not take a deliberative approach incrafting final rules for such provisions as risk retention, shesaid--especially if they rush to meet a statutorily imposedrulemaking deadline.

“It is critical that the six agencies that are charged withimplementing the commercial real estate finance components of thesecuritization risk retention framework take whatever time theyneed to get the rules right," Pendergast testified. "We areconcerned that this will result in the issuance of hastily craftedfinal rules.”