One in six commercial mortgage securities worrisome
Posted on September 4, 2009 at 6:35 am
Fitch Ratings says the number of commercial real estate “loans of concern” grew by 7 percent during July. CRE portfolios are widely expected to provide the next big test for the financial sector.
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Tennessee moves up a list homebuyers don’t want to lead
Posted on September 2, 2009 at 11:27 amBankrate.com says Tennessee homebuyers can expect to pay $2,901 to close on a home purchase this year. That ranks the state 12th, up from 24th a year ago. Nationally, the average costs fell 12 percent in the past year.
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edo boosts executive ranks
Posted on September 1, 2009 at 11:15 am
Nashville-based Edo Interactive, which has hired Jay Graves to be its chief technology officer and Lisa McGinty to be VP of card services. Graves, pictured here, ran and sold SmartDM earlier this decade and was CEO of Hobby Lobby International until this spring. McGinty comes to Edo with years of prepaid and gift-card experience. Edo, which markets digital payment platforms, recently raised more than $8 million.
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Two reasons why CRE is the next domino to fall
Posted on at 6:44 am
The first, say the Journal’s Lingling Wei and Peter Grant, is bad underwriting — the commercial equivalent of making mortgages to people who couldn’t afford them — that already is making its way through the system. The second factor will take a little longer to fully manifest itself.
By the end of 2012, some $153 billion in loans that make up CMBS are coming due, and close to $100 billion of that will face difficulty getting refinanced, according to Deutsche Bank. Even though the cash flows of these properties are enough to pay interest and principal on the debt, their values have fallen so far that borrowers won’t be able to extend existing mortgages or replace them with new debt. That means losses not only to the property owners but also to those who bought CMBS — including hedge funds, pension funds, mutual funds and other financial institutions — thus exacerbating the economic downturn.
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Bankers clutch those purse strings tightly
Posted on August 17, 2009 at 5:18 pmSurveys published Monday by the Fed and the Treasury show that banks increased lending only to those with prime-mortgage-worthy borrowers during the spring.
Most banks said they expected their lending standards would be tighter than average until at least the second half of next year. For subprime companies and consumers, the majority of lenders said those standards will be stricter than normal for the foreseeable future.
SEE ALSO: The Fed and the Treasury’s announcement that they’ll extend the TALF liquidity program for commercial mortgage-backed securities through next June.
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State pockets $2M in auction-rate securities settlement
Posted on June 18, 2009 at 4:10 pmCitigroup will pay the Tennessee Department of Commerce & Insurance $1.6 million and Wachovia will pitch in about $450,000 to end an investigation into their sales of auction-rate securities. The payments are part of a national settlement that will have both banks pay penalties of about $50 million.
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Credit card venture wants to raise millions
Posted on June 15, 2009 at 12:35 pm
The team behind edo Interactive, which last month officially launched its venture marketing prepaid debit and credit cards, is looking to raise $8 million via a private offering.
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A horror flick that hits home for many
Posted on May 14, 2009 at 10:30 pm
The new film from the director behind the “Spider-Man” blockbusters centers on a scroogy mortgage lender who gets her comeuppance in the form of “flames, floods, flies, cadavers and hanging upside down” — oh, and then demons. Yep, the home loan biz has some ugly image problems these days.
“Just like every baseball player didn’t do steroids, you can’t paint our business with a broad brush,” said Cusinato, whose firm has arranged almost $2 billion in home loans, according to its Web site. As for being condemned to hell, he said, “there are certainly a couple of lenders I would like to give a first-class ticket to.”
Fleet One hooks up with Hess
Posted on May 13, 2009 at 2:27 pm
The Nashville-based company has signed a multi-year deal to issue the branded credit cards for the fleet programs of Hess Corp., which runs more than 1,300 gas stations in the Eastern U.S.
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Hazard back at it
Posted on May 5, 2009 at 2:22 pm
This time, high finance’s Hank Williams sits down for a chat with Stanford economist John Taylor, author of the well-known Taylor Rule, and gets inspired to pen what is sure to be another runaway hit on Billboard’s financial chart.
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Comptroller suggests swap changes
Posted on May 1, 2009 at 3:14 pmJustin Wilson today told the State Funding Board that interest rate swaps should be at least $50 million to keep smaller municipalities out of the trouble they got in after deals recommended by Morgan Keegan went south.
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Bredesen: ‘More guidance’ needed from state on muni interest-rate swaps
Posted on April 10, 2009 at 8:33 amThe Governor tells the NYT that more education is needed on the use of municipal bond derivatives that have burned a number of Tennessee cities.
“I think what happened is you had a very sophisticated seller of these things, and some people who were just learning their way making the decisions about how to utilize them,” Mr. Bredesen told reporters.
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Tennessee’s loosey-goosey muni bond derivatives
Posted on April 8, 2009 at 8:05 amThe New York Times lifts the veil on the surprises a number of Tennessee cities have gotten after working with investment bank Morgan Keegan to issue debt. The municipal bond derivatives marketed by Morgan Keegan – which also ran educational seminars on the complex deals – resulted in payments jumping higher as the economy tumbled.
Municipal bond experts say they know of no other state where a firm was allowed to wear three hats; several states prohibit a single firm from acting as both adviser and underwriter. In Pennsylvania, which has such a prohibition, federal prosecutors are investigating accusations that investment banks and financial advisers conspired to sell bonds with inflated fees to school districts.
“It’s like the lion being hired to protect the gazelle,” Robert E. Brooks, a municipal bonds expert and a professor of financial management at the University of Alabama, said of the situation in Tennessee. “Who was looking after these little towns?”
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LP compared to GE
Posted on March 6, 2009 at 9:26 amBut only as an example of what investors, who are frothing about the state of GE Capital, should expect to pay for credit default swaps on junk-rated companies.
Credit-default swaps on the finance arm of GE, which holds $45 billion of cash, are about as expensive as those for building materials-maker Louisiana-Pacific Corp., which posted nine straight quarterly losses.
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