Secondary Market

The decline in the commercial real estate market is finally beginning to level off, but tremendous uncertainty remains about the pace and strength of this recovery, according to the Real Estate Roundtable's latest quarterly Sentiment Survey. Of the 100-plus senior real estate executives who participated in the second quarter survey, 82 percent characterized market conditions today as better than a year ago, up from 73 percent in the first quarter. But, while sentiment is up, that's not to say things are ""good,"" Jeffrey DeBoer, president and CEO of the Roundtable, said.

Senator Bob Corker (R-Tennessee) says he plans to offer up an amendment to the Wall Street reform bill this week that will make ""surgical"" changes to consumer protection laws. Sen. Johnny Isakson (R-Georgia) is joining Corker in his push. Among the items on their agenda are establishing minimum underwriting standards for mortgages, and striking the proposed 5 percent risk retention requirement for mortgages sold as securities.

While today's turbulent market conditions have led some investors to put on the brakes, that's not the case with international real estate investment and services firm Kennedy Wilson. The company hasn't pulled back on its aggressive acquisition strategy, acquiring over 1,600 residential units and over 60 loans secured by real estate within the past year.

A group of real estate developers and partners in the Southeast have announced the launch of a new venture - SunBelt Capital Solutions. The firm, headquartered in Atlanta, is focused on acquiring distressed commercial real estate loans and property in the southeastern part of the country.

Morningstar, Inc., a Chicago-based provider of independent investment research, announced Wednesday that it has completed the previously announced acquisition of Horsham, Pennsylvania-based Realpoint, LLC, a nationally recognized statistical ratings organization that specializes in structured finance. As a result of this completed acquisition, Realpoint will become business unit within Morningstar's equity and credit research business. And over time, the company will be rebranded under Morningstar.

Sen. John McCain and two other Republicans have introduced an amendment to the Senate's reform package that would wean mortgage giants Fannie Mae and Freddie Mac off of federal funding over the next five years and completely dissolve them after 15 years. McCain called the two GSEs ""synonymous with mismanagement and waste"" and the epitome of too big to fail. ""The time has come to end Fannie Mae and Freddie Mac's taxpayer-backed slush fund and require them to operate on a level playing field,"" McCain said.

Community Bank Mortgage LLC, a subsidiary of Washington, D.C.-based American Bankers Association (ABA), announced Wednesday that it has selected Richmond, Virginia-based SunTrust Mortgage, Inc., as one of three preferred secondary market investors. As a result of this selection, owner banks of Community Bank Mortgage can sell loans on a servicing-released basis to SunTrust Mortgage and can access the company's full line of products, including jumbo loans.

With vacancy rates in the office market at record-high levels, it would seem that the options for tenants are endless. But that might not be the case. According to Grubb & Ellis, a real estate services and investment firm based in Santa Ana, California, the amount of available space in the U.S. office market may be overstated, giving tenants fewer realistic alternatives than previously indicated. In a phenomenon dubbed ""zombie buildings"" by Grubb & Ellis researchers, there are many properties that have significant capital constraints and are therefore unable to fund market-level tenant improvement allowances and commissions.

Delinquencies on single-family loans guaranteed by Freddie Mac fell to 4.13 percent in March, down from 4.20 percent in February. It's the first monthly decline reported by the mortgage giant since April 2007, and some say a sign that efforts to improve loan performance are finally gaining ground. Freddie Mac attributed the drop in delinquencies to a higher volume of mortgage modifications and completed short sales.

Florida Attorney General Bill McCollum has launched a civil investigation into one of the state's largest foreclosure law firms. McCollum says Florida Default Law Group, P.L. in Tampa appears to be fabricating and presenting false and misleading documents in thousands of foreclosure cases per month. The case highlights flaws in the documentation of loan ownership that is impeding a number of foreclosure proceedings across the country.