The Mortgage Bankers Association (MBA) and other industry trade groups asked the U.S. House Financial Services Committee to approve a bill that would amend the Securities Exchange Act to modify requirements for qualified commercial real estate. The rules, as written, are expected to negatively affect the CMBS market.
“Those rules are going to fundamentally impact the commercial mortgage-backed securities market, which currently holds more than $500 billion in commercial real estate loans,” said MBA Senior Vice President of Legislative and Political Affairs Bill Killmer. “As finalized, we believe they could hamper the CMBS market by too narrowly defining the commercial real estate loans that qualify for a risk retention exemption. Passage of this legislation will keep the new regulatory regime from having a chilling effect on the commercial real estate finance industry, as well as the overall economy.”
“CMBS provides financing to retail, office, apartments, industrial, healthcare and many other types of commercial real estate,” the letter said. “If the rule is not modified before going into effect at year-end, a large percentage of borrowers across the country will not be able to refinance their loans without additional capital and higher monthly costs. Following the stress this will cause elsewhere in the system, valuations will be hurt and savers’ investments will suffer as a result of the reduced liquidity in the system.”
Joining MBA in the letter: the Commercial Real Estate Finance Council; the Real Estate Roundtable; the National Multifamily Housing Council; the National Association of Home Builders; the National Association of Realtors; the American Land Title Association; the National Association of Real Estate Investment Trusts; NAIOP, the Commercial Real Estate Development Association; Building Owners and Managers Association; the International Council of Shopping Centers; the U.S. Chamber of Commerce; and The Appraisal Institute.