Market Setbacks Leave CMBS Shops Gloomy

Shrinking profit margins and slowing originations are dampening the mood of commercial MBS lenders. Over the past few months, issuers have been battered by wider bond spreads, hedging losses and pushback from investors about credit quality. A new regulation requiring CMBS executives to acept personal liability for securitizations has only added to the list of woes.

And small shops have another thing to worry about: that increasingly risk-averse banks will re-price or even withdraw the warehouse lines they depend on to finance their originations.

The upshot: CMBS lenders are as gloomy as they have been since the market started to rebound from the financial crisis in 2011.

(via CMA)