Would this Work?
Last week, Morgan Stanley announced they had transferred $820 million of loans to Blackstone ( Private Equity Firm). Note I wrote transferred not sold. These loans are for distressed office buildings across the country. Many of the loans come due before the end of the year. Blackstone is negotiating a refi/restructure of the loans.
Why wouldn’t this work with distressed SFR loans?
In my opinion, a transfer of SF REO to an investor, at a discount, makes sense. This could be the answer to the principal write down issue. Lenders could package loans in a city or cities and transfer the loans to local investors. Think of the savings in carrying costs for the lender (taxpayer). This could clean up a bunch of bank balance sheets including the GSE’s.
I know it’s just a pipe-dream. Gotta squeeze every penny out of these deals. Wouldn’t want anyone to miss a bonus or a campaign contribution.
wsjonline.com/11/21/11
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