Role of Multifamily Considered in Context of GSE Reform

Commercial Observer published an article on various aspects of GSE reform, focusing on the role the GSEs play in multifamily loans. Noting that decoupling the GSEs' single family business from its multifamily business could have significant support from some CMBS investors, it discussed how reforms should be specifically targeted towards the GSEs' single family business.

Speaking of the performance of the GSEs' multifamily business during the crisis, one industry representative stated "It's a sector that doesn't really deserve to be in conservatorship."

Robert Ivanhoe, co-chairman of the law firm Greenberg Traurig, stated that privatizing the multifamily businesses of the GSEs could increase the cost of borrowing. However, the article notes that if it is done correctly, private lenders would be willing to step in to take a larger piece of the multifamily lending pie.

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