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Congress calls on Fed to support CMBS market

A bipartisan group of more than 100 members of Congress are calling on the Trump administration and the Federal Reserve to set up a lending facility to support CMBS borrowers through the current stretch, according to a report from the Wall Street Journal.

  • Dig Deeper: Many of the hotels, shopping malls, and office buildings that borrow money in the roughly $550 billion CMBS market said they have been unable to negotiate debt reprieves during the coronavirus pandemic. Some are worried they could lose their properties to foreclosure. At issue is the rigid structure of this market, which wasn’t designed to provide borrowers with temporary payment relief. Those who need to pause payments must work with “special servicers,” which are hired to negotiate on behalf of the bondholders that own the loans.
  • By the numbers: Some 7.15% of CMBS loans were 30 or more days delinquent at the end of May, including 19% of hotel loans and 10% of retail loans. [WSJ]

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