Appraiser News Online Headlines Last Updated: August 19, 2009 Vol. 10, No. 15/16
In hopes of promoting the flow of credit to businesses and households and to facilitate the financing of commercial properties, the Federal Reserve Board and the Treasury Department on Monday approved an extension of the Term Asset-Backed Loan Facility, or TALF, to keep the government-run program functional beyond its original Dec. 31, 2009, sunset date.
Under the joint Fed- and Treasury-approved extension, TALF loans for newly issued asset-backed securities and legacy commercial mortgage-backed securities has been authorized to run through March 31, 2010. In addition, TALF loans for newly issued CMBS, which can take a significant amount of time to arrange, have been extended to run through June 30, 2010.
According to a joint statement released by the Fed and Treasury, "Conditions in financial markets have improved considerably in recent months. Nonetheless, the markets for asset-backed securities backed by consumer and business loans and for commercial mortgage-backed securities are still impaired and seem likely to remain so for some time.”
As noted in a recent Washington Post story, it appears the Obama administration is not planning to put additional federal resources into the TALF program’s effort to boost the commercial sector, though many analysts believe that’s what is needed as a new wave of defaults on the horizon could impact the $814 billion in commercial real estate loans on pace to mature between now and 2011.
The Fed and Treasury, however, have not ruled out increasing TALF funding or extending the program further into the future. As the government agencies mentioned in their joint statement, “[We] are prepared to reconsider [our] decision if financial or economic developments indicate that providing TALF financing for investors' acquisitions of additional types of securities is warranted.”
For more information on the extension of TALF, visit
http://www.federalreserve.gov/newsevents/press/monetary/20090817a.htm.
Labels: appraisals, Federal Reserve, real estate, TALF
