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Washington
Dodd asks regulators to report on CRE market
WASHINGTON (2/23/10)--Senate Banking Committee Chair Christopher Dodd (D-Conn.) has asked federal regulators, including the National Credit Union Administration, to report on their efforts to stabilize the commercial real estate (CRE) market. Dodd sent a letter to Federal Reserve Board Chairman Ben Bernanke with his request. He cited a Congressional Research Service report that indicated delinquency rates for commercial mortgages increased to 6% in January from 4% at the end of the third quarter of 2009. He also noted that at a Congressional Oversight Panel hearing last month, a Fed official said that Fed examiners are reporting a “sharp deterioration in the credit performance of CRE loans in [financial institutions’] portfolios and loans in commercial mortgage-backed securities" and said more than $500 billion of CRE loans will mature each year over the next few years. The panel also reported that nearly half of CRE loans at present are underwater, and that the largest loan losses are projected for 2011 and beyond, Dodd said. “I believe that the weakness in the CRE market requires prompt and robust responses from the regulators to guard against harmful effects on financial institutions and the economy,” Dodd said. “I urge you to redouble your efforts to provide appropriate oversight of this vital component of our economy, and look forward to working with you to bring much-needed stability to the CRE market.”


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