Trepp Reviews Performance of Pre- and Post-Risk Retention Loans As the Regulation Hits its Five-Year Mark
Trepp, a leading provider of information, analytics, and technology solutions to the structured finance, commercial real estate (CRE), and banking markets, has released an in-depth analysis of the performance of CMBS loans pre-risk retention and post-risk retention as the regulation hits its five-year mark.
NEW YORK, March 15, 2022 /PRNewswire-PRWeb/ -- Trepp, a leading provider of information, analytics, and technology solutions to the structured finance, commercial real estate (CRE), and banking markets, has released an in-depth analysis of the performance of CMBS loans pre-risk retention and post-risk retention as the regulation hits its five-year mark.
In late 2016, the U.S. CMBS market saw its biggest change since the Great Financial Crisis with the introduction of Risk Retention. Trepp's analysis looked at whether risk retention loans perform better than pre-risk retention loans. Trepp reviewed the most recent delinquencies for the two categories of loans as of December 2021 — the five-year anniversary of risk retention.
"In the early days, as we were running up to risk retention, there was a thought this might doom the market and issuers may not want to hold onto a portion of the risk, however, the regulation has been a net positive for everyone involved in the transaction," said Manus Clancy, Trepp Senior Managing Director., "The introduction of risk retention has made the process more efficient and fruitful, a testament to the validity of this challenge."
The Risk Retention regulation was introduced to force issuers of securitized products to hold on to some of the risk behind their loans to ensure they maintained "skin in the game." Regulators believed that by ensuring issuers retained exposure to loans they originated, underwriting would be stricter.
Some feared that the rules put forth would ultimately make CMBS less competitive than other lenders. As it turned out, the fear was misplaced.
Access Trepp's analysis for an in-depth look at the performance of risk retention loans over the past five years: https://www.trepp.com/trepptalk/five-years-in-has-risk-retention-had-its-desired-effect
About Trepp
Trepp, founded in 1979, is the leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the solutions and analytics they need to increase operational efficiencies, information transparency, and investment performance. From its offices in New York, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp subsidiary, Commercial Real Estate Direct, is a daily news source covering the commercial real estate capital markets. Trepp is wholly owned by Daily Mail and General Trust (DMGT).
Media Contact
Hayley Collier, Trepp, +1(212) 754-1010, [email protected]
SOURCE Trepp
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