With those holdings’ values having been sunk by the coronavirus pandemic crashing the economy, banks are asking these lenders to put up more collateral. For some, that’s causing a liquidity crunch.For banks, an analysis by data firm Trepp said the institutions’ commercial real estate loans would in the worst-case scenario see a 2.7 percent loss rate, less than what banks saw following the 2008 financial crisis. Trepp pegged the peak default rate between 2008 and 2011 at 4.4 percent. [WSJ] — Erin Hudson This content is for subscribers only.Subscribe Now Nonbank commercial property lenders risk running out of money as banks demand more collateral (Credit: iStock)TPG Real Estate Finance Trust is one of several nonbank property lenders feeling the squeeze as markets fall.Real estate investment trusts, hedge funds and private equity firms that have issued billions in construction loans, mortgages and bonds backed by property debt are now facing a cash crunch, the Wall Street Journal reports.TPG is delaying its first-quarter dividend payments in preparation for needing additional cash collateral, but the company noted in a statement that there’s “no certainty” it can continue paying, according to the Journal.The Angelo, Gordon & Co.-managed AG Mortgage Investment Trust said last Friday that it had “received an unusually high number of margin calls from financing counterparties” and admitted to missing some of the deadlines.ADVERTISEMENTNonbank lenders stepped into the commercial real estate space after banks withdrew following the 2008 crash, but many funded deals using bank debt facilities secured by corporate guarantees, loans and bond holdings.Read moreShadow bankers could be left with tab if hotels failPandemic may push Kushner Cos’ Times Square retail into defaultMortgage firms gear up for “liquidity tsunami”
MPs today accused the legal consumer watchdog of ‘helping the destruction of access to justice’ during a heated exchange in parliament.Leaders of the Legal Services Consumer Panel appeared before the justice committee of the House of Commons this morning to give evidence on the fallout of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).The organisation has welcomed the emergence of professional McKenzie friends as an alternative to public funding, and even provided office space for a new representative body to meet.Yesterday it produced a report predicting the advent of ‘self-lawyering’.Labour MP and committee member Andy McDonald, himself a solicitor, questioned how litigants are protected by a sector that remains unregulated.‘Lawyers have gone through training and shelled out for professional indemnity insurance and are experts,’ he said. ‘Yet somebody can toddle along, say they are a McKenzie friend and start undermining and undercutting solicitors.’His committee colleague Jeremy Corbyn, also a Labour MP, told the witnesses: ‘You are helping the destruction of universal access to justice and destroying careers.’Elisabeth Davies, the consumer panel’s chair, said the group was trying to look at solutions to fill the gap caused by the removal of legal aid for large parts of civil justice.‘We don’t know [non-traditional legal services] are second-rate quality. We want the absolute balance between consumer justice and protection.’She added it was ‘inevitable’ that alternative providers would come forward after LASPO and said just 21% of people who seek advice now get it from a regulated lawyer.The committee heard claims that some professional McKenzie friends can earn up to £50,000 a year advising litigants in family matters.But panel adviser Steve Brooker told the committee that most earn much less and further regulation could increase costs to points where we ‘drive them away’.In the same session, David Holland, chief executive of the Institute of Paralegals, said the blame for the emergence of unregulated advisers should be with solicitors and the Solicitors Regulation Authority.‘McKenzie friends didn’t cause [solicitors] to be unaffordable to clients or put in place a regulatory burden [solicitors] are suffering from,’ he said.
KNOXVILLE, Tenn. (AP) — Tennessee is averaging 46 points, but the Volunteers’ offensive production is somewhat deceptive.With 138 points, the Vols (2-1) have their highest total over their first three games since the 1914 team had 171 points. The numbers seem misleading because two of Tennessee’s first three opponents were Bowling Green and Football Championship Subdivision program Western Carolina.In their only meeting with a major-conference school, the Vols lost 31-24 to Oklahoma in overtime after getting shut out in the last 42 minutes of regulation time. On Saturday, they face a stern test at Florida (3-0, 1-0 Southeastern Conference), which enters the heated rivalry with 10 straight victories over the Vols (2-1, 0-0).“They may be the best defense we’ve faced since we’ve been here,” said Tennessee coach Butch Jones, who is in his third season at Knoxville.Florida will be missing suspended cornerback Jalen Tabor, who sacked Justin Worley, knocked the ball loose and recovered the fumble to set up the only touchdown in the Gators’ 10-9 victory at Tennessee last year.But that defense remains potent.Florida had six sacks and two interceptions while allowing just eight pass completions last week in a 14-9 triumph at Kentucky. The Gators are eager to deliver a similar performance Saturday in front of their home crowd.“We preach we don’t lose at home,” Florida safety Marcus Maye said. “The past couple of years we’ve lost a couple of games, let a couple of games slip away. We’re back to trying to get things back to how they usually are around here. Protect the Swamp.”The Vols want to learn how far their offense has come the last two weeks.Tennessee blew a 17-0 lead against Oklahoma because its offense wasted favorable field position and couldn’t produce a game-clinching score. The Vols said afterward that they struggled to adjust to Oklahoma’s blitzes.Offensive coordinator Mike DeBord says the Oklahoma experience should help prepare Tennessee’s offensive line for Saturday’s test.“An example would be the (Oklahoma) game we had some problems with protection, picking people up when we were trying to throw the ball deep,” DeBord said. “In this past game (against Western Carolina), we picked them up twice on a blitz and hit the ball deep.”Aside from that second-half performance against Oklahoma, Tennessee has scored pretty much at will despite getting little production from some of their most notable receivers.Alton “Pig” Howard, who led the Vols in catches and yards receiving last year, has only one reception. Jones said Wednesday that Howard “is nursing some things” and declared his status uncertain for Saturday’s game. Jones indicated Monday that Howard had “tweaked his ankle a little bit.”Marquez North, who has caught at least 30 passes each of the last two seasons, has only four receptions for 38 yards.The Vols have made up for it with their rushing attack. Tennessee leads the SEC with 158 carries and rank third in the conference with 246 yards rushing per game. Jalen Hurd has rushed for 300 yards and five touchdowns, while Alvin Kamara averages 7.5 yards per carry.“They’re going to play a long time beyond this league,” Florida coach Jim McElwain said. “They’re really, really good players. We have to be really good tacklers this week and hopefully not give them a bunch of gaping holes.”Tennessee’s offense has done much of its damage so far against porous defenses.Bowling Green is allowing 43.3 points per game. Western Carolina lost to The Citadel before coming to Tennessee and recorded its only win over Division II Mars Hill. The Vols believe they’re ready for the Gators.“We look at it as another opportunity to go out and show what we can do,” Tennessee center Coleman Thomas said.___AP Sports Writer Mark Long in Gainesville, Florida, contributed to this report.___AP college football website: collegefootball.ap.org___This story has been corrected to show that Western Carolina wasn’t one of Tennessee’s first two opponents.