NAR: The Commercial Mortgage Industry Needs Liquidity Too!

The National Association of Realtors (NAR), the trade group that represents real estate agents and brokers, is reminding the Government that commercial mortgage paper needs love too. Lawrence Yun, the NAR’s Chief Economist is encouraging the Federal Government to step in. Wednesday (12/17/08) in an interview with Reuters Mr. Yun remarked: “Although access to residential mortgages has improved, the opposite is true for commercial loans,” said Lawrence Yun, NAR’s chief economist. “We need liquidity for commercial mortgage-backed securities not only to free the market, but also to rollover existing debt,” And by “need liquidity” he means the taxpayers ought to buy new and existing commercial mortgage debt. “The commercial real estate market is frozen because there is no government backstop. Lenders are not making commercial loans because there are no private investors who want to hold them.”

He’s got a point about the commercial mortgage debt market; very few private dollars are being committed to this area. But is Government intervention a help or a hindrance to recovery? By backing residential mortgage paper but not commercial the Fed’s have inadvertently caused investors to abandon the commercial space for the security of the Government bed-spread that is covering residential.

Indeed, Barclays is touting the relative health of the multi-family mortgage market. Why? Because Fannie and Freddie are buying apartment building paper like crazy. But when money flows to Government backed paper there is not much left for private paper.

Our firm, MasterPlan Capital LLC, has acces to both private and institutional funding sources and is able to originate commercial mortgages against most types of commercial real estate.

Click the link to use our simple, 1 page commercial mortgage application.


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One Response to “NAR: The Commercial Mortgage Industry Needs Liquidity Too!”

  1. Shawn Says:

    I really haven’t been watching what has been going on in the commercial real estate world as far as the economy goes. I took for granted that with more renters that the focus would change a little but not really get hit as hard. It’s good to read articles like this to get a broader picture of things.


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