Wednesday, Sept. 29, 2004 | 11:04 a.m.
The chairman of the Mortgage Bankers Association said that the commercial and multifamily segments will continue to see robust growth as enormous amounts of capital continue to flow into the markets.
Robert M. Couch, association chairman and president and chief executive of New South Federal Savings Bank in Birmingham, Ala., was a speaker Tuesday at the California MBA Western States Commercial Real Estate Conference in Las Vegas. About 860 people registered for the conference, which began Sunday and ended Tuesday.
"Commercial and multifamily business is great, the second quarter of 2004 is the second best quarter on record," Couch said.
In the second quarter of this year there was $33.2 billion and in the first quarter there was $29.9 billion in commercial and multifamily loan originations, he said.
"(The year) '04 is set to be the best year on record for originations," Couch said.
Couch said the intense competition within the mortgage banking industry for the capital that is flooding the commercial and multifamily markets is actually driving interest rates and loan terms down in an attempt to get a piece of the action, Couch said.
He also said consolidation in the industry continues unabated.
In 1996 the top 10 loan servicers had about a 50 percent market share, compared with 72 percent today, Couch said.
Couch also talked about upcoming issues, such as terrorism insurance and the "make available" provision that was part of the Terrorism Insurance Act. The act is set to expire in 2005 and the provision to make the insurance available, that was to expire this year, was extended by the Treasury Department to 2005 as well.
"They thought by the end of 2005 the markets would have calmed down, and it hasn't happened. We continue to see a need to backstop the terrorism insurance market," he said.
Couch said the association thinks there will be an extension of the act and expects to see action on that issue by Congress early next year.
The association also is involved in Real Estate Mortgage Industry Conduit (REMIC) legislation to change provisions in the tax code regarding real estate mortgages that are treated as securities. The current code prohibits changes or improvements to the property or substitutions in collateral.
The association would like to make those changes to property possible, Couch said.
The Mortgage Bankers Association is the national association representing the real estate finance industry, headquartered in Washington.
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