Background
April 27, 1999

The Capital Consortium is a federation of five trade associations — the Mortgage Bankers Association of America (MBA), the Real Estate Roundtable, the National Association of Realtors (NAR), The Bond Market Association (TBMA) and the Commercial Mortgage Securities Association (CMSA) — whose policies are set by a Steering Committee comprised of representatives from each of the sponsoring trade associations. Collectively, members of these five associations represent the broad spectrum of commercial and multifamily real estate professionals active in both the primary and secondary real estate finance markets.

The Capital Consortium was formed in 1992 to address the credit crisis facing the commercial real estate industry at that time. While credit availability has increased substantially since then, the Consortium’s goal of expanding the secondary market for commercial mortgages remains important to ensure and enhance liquidity generally and to help support property values.

From the beginning, the Capital Consortium set out to:

• Help provide greater liquidity for commercial property lenders and owners

• Bring market discipline and stability to the commercial mortgage market for lenders and owners through efficient secondary market operations

• Foster more predictable and favorable legislative and regulatory outcomes

To achieve these objectives, three working groups were formed:

• Creating the Instrument Working Group — responsible for developing ratable documents and identifying due diligence needs; drafting the Capital Markets Mortgage to facilitate the underwriting, origination and pooling of certain loans intended for securitization or for sale in the secondary market; and the Due Diligence Checklist to streamline transactional reporting needs.

• Making the Market Working Group — responsible for developing the Data Elements Guidelines, aimed at providing a uniform framework for issuers, investment bankers, loan servicers and investors.

• Clearing the Barriers Working Group — responsible for identifying legislative and regulatory impediments to the development of the commercial secondary mortgage market and advocating removal of such barriers before the U.S. Congress and regulatory officials.

In undertaking The Capital Markets Initiatives, the Capital Consortium’s intent was not to promulgate specific standards for use in all commercial real estate transactions. Rather, the Consortium embraced a global perspective, considering the broad needs of the market in arriving at commonly accepted guidelines in recognition of the evolving and dynamic nature of the commercial secondary mortgage market and the unique characteristics of individual transactions.