May 2015

big benThis month’s decisive, if unexpected, victory for the Tories has given a boost to the UK’s real estate markets. Following an already strong 2014 and now with even higher expectations for continued growth in 2015, the UK is an interesting play.  In light of this amiable confluence of factors and the increasing difficulty of finding yield here in the States, it’s perhaps time for a rousing rendition of George M. Cohan’s “Over There.”

And hey, legally speaking, it’s a terrific place to invest.  It’s a hot bed of red in a tooth and claw capitalism (at least compared to our other European friends).  The UK has a robust and broadly understandable legal system and a respect for property rights soundly rooted in the common law; all in all, a genial environment for investment.
Continue Reading A Guide to UK Real Estate and Real Estate Finance: Why Don’t You Speak Proper English?

You know, as an economist, I am a pretty good piano player. I struggle every morning, marinating in the news cycle, to try to understand what’s happened to the US economy and what its impact will be or might be upon the business of commercial real estate finance. We apparently are inching up on the point where the Fed may or may not do something, but as we discussed in this column a while back, the Fed’s idiosyncratic love affair with transparency is creating a cacophony of voices both in and outside of government that make even that threshold question hard to answer. It would seem we ought to pay attention, but, as the fed-heads and the commentariat continuously randomly blather and bloviate it’s just all noise, so what’s the point? I have been and remain fundamentally confused and in all the chatter I don’t see much wisdom or insight.
Continue Reading Commercial Real Estate and the Broader US Economy: What Me, Worry?

libertyTRIA is back.

On November 26, 2002, in the wake of the September 11th attacks, President Bush signed the Terrorism Risk Insurance Act of 2002 (TRIA), and with it, breathed life into a new player in the catastrophic event insurance market: the government.

TRIA created a terrorism risk insurance program (TRIP) of dual back-scratching: the insurer was required to make available terrorism insurance, and the federal government committed itself to taking the cataclysmic risks off the table. The law created a temporary federal program that provided for shared public and private compensation for certain insured losses resulting from a certified act of terror.  The Terrorism Risk Insurance Extension Act of 2005 (TRIEA) extended TRIP through December 31, 2007, and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA 2007) further extended TRIP through December 31, 2014.
Continue Reading The New Terrorism Risk Insurance: Still a Cost of Doing Business

What happens when a debtor, whose loan is pooled and securitized, files for bankruptcy? Are payments made to investors recoverable as fraudulent transfers or preferences?

Until recently, no published court opinion addressed this issue.  However, in what is sure to be welcome news for investors in securitization vehicles, late last month, a Bankruptcy Court in…

Close-up Foreclosure Real Estate Sign in Front of House.Just when you thought we were out of the housing crisis weeds of ’07—think again.  Apparently when an abundance of people buy homes they can’t afford and predictably fall behind on their payments, the judicial foreclosure process becomes log-jammed.  Enter our latest housing crisis nemesis: the statute of limitations.

Lenders must generally file a foreclosure action prior to the expiration of the state specific statute of limitations.  This means that once a borrower has defaulted on their mortgage payments and the lender has accelerated the debt, the lender has a statutorily defined time period in which it may bring an action in foreclosure.  But what if the initial foreclosure action, filed within the limitations period, is dismissed for technical reasons?  Must the lender file the second foreclosure action within the same limitations time period that began running on the date of the original default and acceleration?  Some New Jersey and Florida courts think so, which can be a terrifying result.Continue Reading Foreclosure Attempt Blocked? What You Should Know Before the Clock Hits Zero