CREF Highlights

Thomas Kim tkim@mba.org

December 14, 2017


Commercial and multifamily developments and activities relevant to your business and our industry.

House and Senate Agree to Tax Conference Committee
Early Saturday morning, Dec. 2, the Senate passed H.R. 1, the Tax Cuts and Jobs Act by a vote of 51-49, with Senator Bob Corker, R-Tenn. the sole dissenting Republican senator.

MBA was able to successfully modify a provision that would drastically change the tax treatment of mortgage servicing rights. The provision would require any item of income that an accrual taxpayer recognizes for accounting purposes, including mortgage servicing rights, also be recognized for tax purposes. The legislation also reflects key priorities that MBA has strongly supported, including preserving the business interest deduction for real estate and section 1031 like-kind exchanges for real property. This week, both chambers voted to proceed to a conference to settle differences between each chambers' tax bills.

For more information, contact Tom Kim at tkim@mba.org or Bill Killmer at bkillmer@mba.org.

Congress Includes Short-Term Flood Insurance Reauthorization in Government Funding Bill
With both chambers unable to reach an agreement on flood insurance reform, a short-term extension to the program has been included in legislation that funds the government until December 22.

Earlier this month the House passed bipartisan legislation to reform the National Flood Insurance Program in a 237-189 vote. The House bill reauthorizes the National Flood Insurance Program for five years and makes important reforms that expand the private insurance market by exempting commercial and multifamily properties from the mandatory purchase of NFIP coverage while maintaining access to the program. Senate leaders, who are expected to propose their own legislation, have not reached a consensus on a long-term reauthorization.

For additional information, contact Kathy Marquardt at kmarquardt@mba.org.

Senate Banking Committee Approves Powell as Fed Chair
Last Tuesday, the Senate Banking Committee approved the nomination of Jerome Powell by a vote of 22-1 to be the next Chair of the Federal Reserve, with only Senator Elizabeth Warren, D-Mass., dissenting. The nomination now proceeds to the full Senate. Powell is nominated to replace Chair Janet Yellen whose term ends on February 3, 2018. Powell, who is currently a member of the Federal Reserve Board of Governors, has extensive experience in the private and public sector including the Treasury Department.

With three pending vacancies on the Federal Reserve Board of Governors--increasing to four after Chair Yellen steps down-Pres. Trump will be able to leave his mark on the Federal Reserve.

For more information, contact Tom Kim at tkim@mba.org or Bill Killmer at bkillmer@mba.org.

Regulators Reach Agreement on Basel Banking Rule Revisions
Last Thursday, Mario Draghi, the president of the European Central Bank and chair of the Basel Committee of Banking Supervisors, announced an agreement in Frankfort, Germany on revisions to the post-crisis "Basel III" global banking reforms and capital requirements.

The provisions--informally dubbed Basel IV--call for an aggregate output floor calibrated at 72.5 percent of the risk-weighted assets calculation provided by the regulators, which is also a standardized approach. MBA is working to analyze this complex document to identify its impact on the commercial real estate industry. The new Basel changes will be implemented starting 2022 with full implementation to be completed in 2027.

For more information, contact Bruce Oliver at boliver@mba.org.

MBA Hosts 4th Annual Summit on Diversity and Inclusion
MBA hosted its largest-ever Summit on Diversity and Inclusion in Washington, D.C. last week. Keynote speakers included the Honorable Mel Watt, Director of FHFA, and Marc Morial, President and CEO of the National Urban League.

Speakers gave practical advice on implementing strategies for improving lenders' market outreach to diverse communities. Leadership sessions also highlighted information on the importance of inclusion in creating high-functioning companies.

For the first time, the summit included a kick-off by mPower with the event, "mPowering Women to Lead," hosted and moderated by Marcia Davies and introduced by MBA Vice Chairman Brian Stoffers, CMB. It also included a roundtable event hosted by mPact, MBA's young professionals networking group.

For more information about the Summit, contact Tamara King at tking@mba.org or Dawn Williams at dwilliams@mba.org.

VIDEO: MBA Vice Chairman Brian Stoffers, CMB, Talks Industry Trends and #CREF18
Brian Stoffers, CMB, Global President of Debt & Structured Finance at CBRE Capital Markets and Vice Chairman of the Mortgage Bankers Association, sat down with MBANow to reflect on where we are today as an industry and why attending MBA's Commercial Real Estate Finance/Multifamily Housing Convention & Expo is vital to our members' success in 2018 and beyond. Watch here.  

MBA's CREF/Multifamily Housing Convention & Expo 2018
Join more than 3,000 commercial and multifamily real estate finance professionals February 11-14 in San Diego for four days of networking, relationship building and deal making. Attendees will hear from Geoff Colvin, Senior Editor-at-Large at Fortune Magazine; Steve Case, Chairman and CEO of Revolution LLC; Carla Harris, Vice Chairman, Wealth Management, Managing Director and Senior Client Advisor at Morgan Stanley; as well as Mike Eruzione, captain of the 1980 U.S. Olympic Hockey Team.

For more information, visit MBA's website.

MBA Education Hosts Webinar on Excel for CRE Professionals
Join MBA Education on January 17 for an interactive webinar that will explore the ways in which to create a useful and powerful spreadsheet when analyzing commercial real estate. Using an office building case study, William Anderson, Associate at MetLife Real Estate, will demonstrate the steps taken to create a spreadsheet, project income and expenses over a holding period, integrate various commercial real estate formulas including but not limited to debt service, discounted cash flow analysis, NPV, IRR, MEY and demonstrate how to link two or more workbooks together. This is a great event for those new to the industry or those that are looking to sharpen their skills.

To register, click here. For more information, please contact Allison Yaworske at ayaworske@mba.org

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