Tag: banks

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Banks Have a Big Real Estate Problem But It’s Commercial, Not Residential – MishTalk

Banks Have a Big Real Estate Problem But It’s Commercial, Not Residential – MishTalk

Forget about bank doom loop stories over residential mortgages. Instead put the spotlight where it belongs.

Not Residential!

A reader asked me to comment on Peter Schiff: Banks Have a Bigger Real Estate Problem Today Than They Did in 2007.

Banks are more vulnerable to the housing market now than they were in 2007.

Most people in the mainstream will scoff at that statement. They’ll tell you that the situation is very different today. After all, we don’t have a big problem in the subprime mortgage market. We’re not seeing a big spike in defaults. That’s true. The problem is different this time. And it’s actually worse.

So, what’s the problem?

As Peter Schiff explained in a recent podcast, the problem this time is the mortgages themselves.

As Peter points out, a 3% mortgage is a huge asset for the borrower. But it’s a huge liability for the lender. So,

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Commercial Real Estate Lending Threatened by New Rules for Banks: MBA

Commercial Real Estate Lending Threatened by New Rules for Banks: MBA
  • Basel III proposals would cripple commercial property financing, MBA CEO Bob Broeksmit said. 
  • The proposed regulation would require banks to maintain more capital to protect against loan losses.
  • “Basel III could be the end of bank real-estate finance as we know it,” Broeksmit said. 

Proposed rules that would require bank lenders to maintain a thicker capital buffer to protect against losses will intensify ongoing real estate turmoil, the head of the Mortgage Bankers Association said this week. 

MBA CEO Bob Broeksmit slammed the proposal, saying that it threatens to hold back bank lending and stifle liquidity in the commercial property sector. 

“They’re called the ‘end-game proposal,’ but only one of those words is accurate. Basel III could be the end of bank real-estate finance as we know it,” Broeksmit said

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Blackstone’s Wien Rings Alarm on Stocks, Real Estate, Banks, Recession

Blackstone’s Wien Rings Alarm on Stocks, Real Estate, Banks, Recession
  • Stocks, real estate, banks, and the economy may be in danger, Byron Wien has warned.
  • Earnings weakness could tank the S&P 500 by 10% or 20%, the Blackstone executive said.
  • Wien sees a risk of recession, and higher rates hitting commercial real estate and bank lending.

Stocks, real estate, banks, and the wider US economy are all flashing warning signs, one of Wall Street’s leading strategists says.

“Everything that I’m looking at makes me think that there is trouble ahead,” Byron Wien, the vice chairman of Blackstone’s private wealth solutions arm, said during a recent Rosenberg Research webcast. “And if I’m right about that, then the market is dangerous.”

Wien, who spent 21 years as Morgan Stanley’s top US investment strategist, is known for his

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Big Banks Are Trying to Dump Commercial Real Estate Debt As Pressure Mounts

Big Banks Are Trying to Dump Commercial Real Estate Debt As Pressure Mounts
  • Big banks are trying to dump commercial real estate loans as pressures mount in the sector. 
  • JPMorgan, Goldman Sachs, and Capital One are among those trying to shed debt exposure, sources told Bloomberg.
  • Some banks are having trouble securing buyers, and have been holding onto loans as they search for a deal.

Big banks want to some of their commercial real estate loans, but buyers are proving scarce as troubles pile up in the sector, according to report out from Bloomberg this week.

JPMorgan, Goldman Sachs, Capital One, and M&T Bank are among firms trying to whittle down their commercial real debt holdings, sources familiar told Bloomberg this week, but have been struggling to find many interested buyers.

Banks could be willing to sell property loans

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Treasury Secretary Yellen warns of commercial real estate ‘issues’ that could strain banks

Treasury Secretary Yellen warns of commercial real estate ‘issues’ that could strain banks

““I do think that there will be issues with respect to commercial real estate.””


— Treasury Secretary Janet Yellen, in an interview Wednesday with CNBC’s “Squawk Box.”

Treasury Secretary Janet Yellen, in her first interview since the U.S. debt-ceiling was lifted last week by Congress, warned on Wednesday about the potential for banks to feel strain from their exposure to weakening commercial real estate valuations.

Yellen was asked by CNBC “Squawk Box” host Andrew Ross Sorkin about if she’s worried about the state of estimated $20.7 trillion commercial real-estate market, particularly the office, and if weakness in the sector could potentially spark more bank failures.

“Well, I do think that there will be issues with respect to commercial real estate,” Yellen said. “Certainly, the demand for office space since we’ve seen such a big change in attitudes and behavior toward remote work has changed and especially in

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