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US largest commercial real estate lender going bankrupt

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It is time to consider the fact that there is a comet head of our economic progress and nobody wants to address. Everyday, reporters, politicians, analysts tell poulations that the recovery is underway and that “Green shoots” are taking hold when it is obvious there is catastrophe awaiting and hidden under our noses.

The media has not addressed the fact how the crashing dollar, $80 oil, soon to be resetting Option mortgage ARMS, a crashing commercial real-estate market and the associated CMBSs, foreclosures, not to mention our growing debt, does not warrant constant discussion and true preparedness.

Capmark Said Ready to File for Bankruptcy

Capmark Financial Group Inc., one of the nation’s largest commercial-real-estate lenders, plans to file for bankruptcy as soon as this weekend, a person familiar with the situation said.

The much-expected move underscores the deep problems in the business-property market. After suffering from the collapse in residential mortgages, U.S. banks face steep losses from commercial real-estate loans. Capmark has originated more than $10 billion in commercial real-estate loans, according to Moody’s Investors Service.

It also represents a blow to the company’s private-equity owners. In 2006, a group led by KKR & Co., Goldman Sachs Capital Partners and Five Mile Capital Partners acquired the lender GMAC LLC’s commercial-real estate business and renamed it Capmark. As of March 31, the investor group owned about 75% of the company, with GMAC and its employees owning the balance.

The Horsham, Pa., company recently reported a $1.6 billion second-quarter loss and warned it might be forced to seek Chapter 11 bankruptcy protection. KKR has already written down its investment in Capmark to zero.

Capmark recently entered an agreement to sell its North American servicing and mortgage-banking operations to a new company owned by Warren Buffet’s Berkshire Hathaway and Leucadia National Corp. for as much as $490 million. Under the deal’s terms, the sale could occur while Capmark is in bankruptcy, but would require a bigger cash payment.

Adding to Capmark’s pressures, the Federal Deposit Insurance Corp. had notified the company that it must raise capital and boost liquidity at its Utah bank, which has roughly $10 billion in assets.

One Comment

  1. The Gohari Law Firm The Gohari Law Firm October 29, 2009

    Very nice information. Thanks for this.

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