1 post tagged “cbre capital markets enews 7-15-2008”
Check out http://capitalmarkets.cbre.com/ for all the latest real estate capital markets news. This is from the latest eNews.
• Amid stress in the capital markets, Fannie Mae raised $7.4 billion of additional capital in May, for a total of more than $14 billion in new capital since November of 2007. Fannie Mae announced end of last week that its capital level is substantially above both their statutory minimum capital and the OFHEO-required 15 percent surplus over minimum capital. Representatives at Fannie Mae stated, “In fact, we have more core capital, and a higher surplus over our regulatory requirement, than at any time in this company's history. As we work through this tough housing market, we are maintaining a strong capital base, building reserves for our credit losses, and generating solid revenues as our business continues to serve the market.”
• The SEC will begin a review of fair-value accounting rules that are causing chaos for some real estate investors. Those rules have forced certain lenders and investment managers to take sharp writedowns against the value of some of their debt investments, including CMBS. The roundtable of accountants, bankers, insurers and investors is expected to focus part of the discussion on FAS 157, a financial accounting standard that took effect late last year. It requires asset-backed securities, including CMBS, mortgages and other debt investments, to be marked to market or valued at the price they would fetch if sold today versus their capitalization rates or values if they were held for their full investment time frames.
• Despite declining origination volume, loan quality has improved. The percentage of amortizing loans in the 2008 vintage has risen to near 35%, up significantly from 2006 and 2007 and underwritten debt-service-coverage ratios have leveled off from their five year decline, reports JP Morgan.
• The MBA reports, across all mortgage loan types (prime, nontraditional, and subprime) lenders are reporting tighter underwriting standards. The greatest relative increase can be seen in the prime sector. Respondents reporting tighter underwriting standards have increased to 62% (Q2 2008) from 15% (Q2 2007).
Posted by: Richard
