Asset Securitization Report - October 2018

A growing number of asset managers are waking up to the opportunity to lend to small and medium-sized companies, and much of this direct lending is making its way into the securitization market.

A conflict between risk retention rules and prohibitions against self-dealing were limiting options for some lenders to hold skin in the game; a no-action letter issued to Golub Capital creates a "clear path" to compliance.

While banking regulators are currently looking the other way when corporate debt packages exceed 6.0 leverage, that could easily change under a new administration or Congress.

Look for more providers of property assessed clean energy financing for commercial buildings to follow CleanFund and Greenworks Lending into the securitization market next year.

It can be a more efficient way to raise regulatory capital than relying solely on equity, but lenders that securitize this debt have struggled to get the market back off the ground.

Nearly 72% of attendees said their institutions were either only going to get involved “at the appropriate time” or “let the market figure out” how to move to a new benchmark.

Fannie Mae and Freddie Mac’s involvement in the single-family rental market may have been short-lived, but it still had a positive effective, according to Beth O’Brien, CEO of CoreVest.

Auto loan securitization has been in overdrive this year, even if the global tussle over import tariffs is injecting a note of caution.

The report from an advocacy group that focuses on college affordability says that schools need to do a better job of educating students about their eligibility for federal loans, which typically carry lower interest rates than loans from banks and other private-sector lenders.

The House of Representatives passed two bills that would tie appraisal waivers for Small Business Administration loans to bank rules for commercial real estate loans, despite objections from the Appraisal Institute about its members being cut out of transactions.

The agency wants more information as it conducts fair-lending exams, but conflicting statutes make writing a data collection rule difficult.