The U.S. Treasury’s announcement that commercial mortgage-backed securities will now be accepted as eligible collateral for the Term Asset-Backed Loan Facility (TALF) will encourage investment in the commercial real estate market, according to the National Association of Realtors®.
Over the past year, the credit crisis that has permeated the world’s capital markets has increasingly curtailed commercial lending activity. Banks have tightened their credit standards and reduced loan volume while the commercial mortgage-backed securities market has stopped functioning effectively. Without liquidity, commercial borrowers face a growing challenge of refinancing maturing debt and the threat of rising delinquencies and foreclosures.
“A severe lack of credit threatens commercial real estate and poses significant risks for the whole economy,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Expanding the TALF and opening it up to commercial mortgage-backed securities is a movement in the right direction, and welcome news for the American economy.” To read the entire article click here.