Banking Chief Calls Refis 'Next Shoe to Drop'

NEW YORK CITY-In his opening remarks at the 29th annual BuildingsNY conference Tuesday, the state’s banking chief described the hundreds of billions of dollars in maturing commercial mortgages as “the next shoe to drop.” Richard Neiman, superintendent of banking for New York State, told his audience that the issues here were similar to the circumstances that brought on the subprime crisis, including lax underwriting and declining property values. However, he said, unlike the subprime implosion, which caught much of the US by surprise, “here is a time when we have the data and perhaps the time to act on it.”

Neiman called on the commercial real estate community to work together, and with government officials, to form what he called “critical partnerships” to get through the credit crisis. “Through healthier buildings we have healthier communities,” he said in his speech at the Jacob K. Javits Convention Center, adding that the vitality of commercial real estate depends on access to credit, which lately has not been as healthy as it should.

In addition to overseeing the state’s banking system, Neiman also has what he called “really a unique responsibility” as a member of the TARP Congressional Oversight Panel, appointed by House Speaker Nancy Pelosi. As part of his mission to help gauge the success of TARP, Neiman has presided over field hearings, including one on commercial lending held May 28 at New York University. With presenters including the Real Estate Roundtable’s Jeffrey DeBoer and Deutsche Bank’s Richard Parkus, “The data that we heard was quite sobering,” Neiman said Tuesday.