The great laxative is CMBS.  Billions will start to flow in the coming months.  Each billion dollars raised will go to banks in the form of paid off short term loans.  Banks will then be allowed to lend those same billions for more short term loans.  The money market for real estate will be running again.

The White House will again allow CMBS loans to go ahead, now that the financial re-regulation act passed into law.  Bankers were forced to pony up big campaign funds for Democrat congressmen to keep the re-regulation moderate.  Bankers paid big bucks and the law has limited teeth.  Both sides got what they wanted.  Democrat candidates have lots of money to throw at TV ads this fall.

CMBS loans should have restarted in a big way at the start of the year.  One CMBS deal went through last fall.  Others were lined up to go.  No way.  The administration stopped everything.

Banks use short term funds-our checking accounts and savings accounts- to make loans.  They should not make long term loans.  Too risky as regulators remind bankers.  Loans that were supposed to be short term became long term by default- there has been no long term money to pay off the bank loans.  Banks reached the maximum amount for real estate allowed by regulations when CMBS disappeared.

CMBS loans bring those with long term funds- pension funds, endowments, and water boards- into real estate.  CMBS shut down 3 years ago during the credit crunch.  Hence banks became full of it and could no longer make new loans.  Now  bank rest rooms will be busy.