Deconstructing The Commercial Mortgage Market

As lending slows, borrowers turn to insurers and hedge funds for loans

June 23, 2008

The credit crisis that's roiled Wall Street for nearly a year has dramatically changed how commercial properties are financed, altering the roles of different participants in a financial food chain that underwrites mortgages for properties such as malls and office buildings and then resells them into securities. Borrowers have had to turn to so-called portfolio lenders such as insurance companies and banks. In some cases, hedge funds and other funds have stepped in to provide short-term loans.

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