NEWSWed, Jun 30Banks Rrturn to Commercial Mortgage Bonds©New York Times 2010 Once dominant, and then dormant, commercial real estate loans are beginning to show signs of life on the trading floor after a two-year slump. Attracted by more conservative underwriting and the perceived bottoming-out of property values, banks are returning to the commercial mortgage-backed securities market, albeit cautiously. Before the bubble burst, nearly half of all commercial real estate deals were financed by loans related to mortgage-backed securities. As a lending instrument, they allow banks to remove loans from their balance sheets by bundling them into a diversified pool, which is then issued as a bond. The payments collected from the sales are put toward future real estate loans. Read more. |
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