| NEW YORK
NEW YORK Feb 24 The Mortgage Bankers
Association is lobbying the U.S. government to expand the reach
of a $1 trillion lending program to existing commercial
mortgage-backed securities, an MBA executive said on Tuesday.
The MBA is making headway in its initiative to get the
Federal Reserve to provide funding for investors who would
purchase the outstanding commercial mortgage bonds that are
clogging bank balance sheets, in addition to new ones, Jan
Sternin, a senior vice president of the MBA's commercial
mortgage group, told Reuters.
"There's been indication that we are down the road" toward
making existing commercial assets eligible, Sternin said.
U.S. Treasury Secretary Timothy Geithner earlier this month
announced an expansion of the Term Asset-Backed Securities Loan
Facility (TALF) from consumer loans to mortgages on commercial
properties, and in size from $200 billion. The program, to be
launched soon, is aimed at unfreezing consumer credit markets
by focusing funding on the purchase of new loans.
The problem is that the credit crunch has halted issuance
of CMBS, whose yields around 15 percent have put a stop to new
lending, analysts said. Programs that would provide bids for
outstanding assets, such as TALF, could help create a floor
that would attract other buyers, they said.
Jump-starting CMBS would also be challenged by the current
environment for office, retail and apartment buildings, where
delinquencies are rising and property values are falling.
(Editing by Marguerita Choy)