Wrapup: Mortgage Bankers in San Diego

Bisnow was on hand in San Diego (tough job, we know) to hear CIBC World Markets US real estate finance head Michael Higgins, above, who said the company has never gotten out of the business, "this downturn or the last downturn." CIBC has a good appetite for new lending—it's hoping to make larger loans ($50M to $300M) for its balance sheet, and "we're back fully in the CMBS business." Allstate Investments' Boston-based Sam Davis says the market is "absolutely in a recovery," but capital is ahead offundamentals. That's not a bad thing "unless it gets too crazy too soon." But it's a tale of two cities: There's fundamental improvement in certain markets but not others, and uncertainty is still high. Allstate's trying to stick to the country's 30 or 40 largest metros.
We snapped the primary lending panel. According to Meridian Capital Group's Marty Lanigan, debt is following equity, and equity is starting with the most diversified, healthiest economies. Guggenheim Partners' Robert Brennan says investors are looking for liquidity, but there's still a mismatch between what the capital is looking for and debt and equity opportunities—and even the bond space. The market is following a classic recovery—money flows to the best assets, the best borrowers, and the best part of the capital stack first. Robert warns that Europe?s not in the clear and that the regulatory environment is a wild card. ?If interest rates go up, it's game over.?
The real estate crisis put loan servicers under the klieg lights and highlighted the role they play. GEMSA Loan Services' Joe Beggins, Fitch Ratings? Stephanie Petosa, Prudential Asset Resources?Catherine Rodewald, Amherst Securities? Darrell Wheeler, MetLife?s Gary Otten, and Wells Fargo?s Jose Becquer say servicers are trying to do more with less and keep troop moraleup. Over half of borrowers are struggling. Internally, a lot more risk management units are driving servicers to produce tangible results. Externally, they're getting more scrutiny from ratings agencies about their financial condition. A servicer?s wish list?Better documentation and more standardization, meaning fewer exotic covenants and triggers buried somewhere within 1,000 pages.

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