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Talf aims to repair credit crisis.

In June 2009, responding to the growing credit crisis, the Federal Reserve officially launched the Term Asset-Backed Securities Loan Facility (TALF) to include commercial mortgage-backed securities (CMBS). This program was also expanded to include loans with five-year maturities to help investors finance the purchase of AAA-rated CMBS. Extending TALF to include five-year loans accommodates the longer-term nature of commercial real estate loans because property owners typically take out loans of five, seven or 10 years and refinance the big principle payments necessary when the loans come due.

S&P's expected downgrades complicate the government's TALF program to make financing more available for commercial real estate. Under the current guidelines of TALF, only AAA-rated CMBS are eligible for this program. However, many believe that the federal government will expand TALF guidelines to include loans that were initially AAA-rated, regardless of their current ratings.


In mid-August 2009, the Federal Reserve System and Department of the Treasury announced a six-month extension of TALF, prompted by worries over the meltdown in commercial real estate. The original sunset date of December 31, 2009 was extended to June 30, 2010 for newly issued commercial mortgage-backed securities (CMBS) and to March 31, 2010 for other asset-backed securities and CMBS sold before January 1, 2009, also known as "legacy CMBS."

Last January 2009, IREM adopted a statement of policy urging Congress and the federal government to provide favorable relief to the commercial real estate industry in order to stabilize and provide liquidity to the commercial real estate credit markets. And to help achieve this goal, the IREM policy statement specifically called for the Federal Reserve and the Treasury to exercise their authority to implement and/or expand TALF and encourage its purchase of CMBS and conventional commercial real estate loans.

As reported in, an online resource for corporate and financial dealmakers, TALF has a $1 trillion capacity to lend to investors in order to purchase new asset-backed securities in consumer and commercial real estate debt. It quotes a Fed statement, as follows: "Conditions in financial markets have improved considerably in recent months, nonetheless, the markets for asset-backed securities (ABS) backed by consumer and business loans, and for commercial mortgage-backed securities (CMBS), are still impaired."


STAY INFORMED ON CURRENT ISSUES WITH THE STATE LEGISLATIVE DATABASE IREM tracks bills in all 50 states and encourages you to be proactive by challenging proposed legislation that would have a negative effect on your business. The IREM State Legislative Database is a members-only service that provides comprehensive reporting on proposed legislation. The State Legislative Database allows you to easily search for legislation by state and/or topic. In addition, you will have access to information about the bill including the legislative history, bill text and committee reports. To access the database, go to Scan over the "Public Policy" icon on the tool bar, and then scroll down and click on "State Legislative Database."
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Title Annotation:IN SESSION; Term Asset-Backed Securities Loan Facility
Comment:Talf aims to repair credit crisis.(IN SESSION)(Term Asset-Backed Securities Loan Facility)
Publication:Journal of Property Management
Geographic Code:1USA
Date:Nov 1, 2009
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