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Takeaways from the 2025 Mortgage Bankers Association Conference

By: Scott Williams

Just got back from the Mortgage Bankers Association #CREF conference and want to share my main takeaways while they are fresh. That said, the red-eye back from San Diego was terribly bumpy last night and I am going on about 30 hours straight – so please bear with me.

– Attendance was down. I handicapped it at 25% – 30%. Someone said it felt more like 50%. It was tough to tell, but it was material. I think this was a factor of a lot of people on the lending side attending CREFC in Miami in January, and also NMHC. It seemed like sentiment from both of those conferences was the debt will be there, so there was less focus coming to this conference to learn about the debt markets.

– There is SO MUCH LIQUIDITY in CRE debt right now. The risk-adjusted return on CRE debt, private credit, and paper is SEXY. We only spoke to one group who had a modest increase in their allocation for CRE this year from $1.1 – $1.2ish B. Most groups we talked to were increasing their goals / allocations by 50%! These are groups that did $2B last year saying they are going to do $3B and groups that did $4B saying they hope to do $6B. In addition to bigger allocations, there are totally new and very competitive strategies, including several Agency alternative players coming into the market.

– Fannie and Freddie are painfully slow getting initial feedback on deals. That said, they know it and are staffing up to handle it. This was much welcome news.

– FRAUD was rampant in the height of the 2021 – 2022 gang buster transaction years. This was driven by fraudulent brokers, but also fraudulent Borrowers. It was easy to accomplish and easy to hide at 0% rates, but the tougher things have gotten the more it has all come to the surface. The scrutiny deals are getting on the front-end mostly from the Agencies sucks, but it is pretty warranted all things considered. This should get better with time and as they become more and more confident that they have dealt with the bad actors.

– Lender portfolios are holding up well. There is a lot less distress than I expected, especially in some of the more aggressive bridge lender portfolios. There was only one group we spoke to who had sizeable defaults, and they have brought a top-dog workout guy in to handle it. Lenders are also in the driver’s seat on the deals that are in trouble and are working from a position of power. They are moving quickly where needed. They are happy to continue to work with Borrowers who are playing nice, but there is no more stay for free.

– Sentiment on rates is pretty good. Most think that (outside of some days like today) the 10-year will be sticky at the 4.5% range as an upward bound, and that there is a chance the market works to move the long-end of the curve lower towards 4%. It might take all year, or maybe into next, but not a lot of surprise to the upside on rates is expected.

– Spreads are super tight and could even get better if the yield curve steepens. This goes along with the abundant liquidity and demand for paper in the market, but this theme should maintain for the year and will be welcomed by Borrowers.

– Equity is still working hard to make deals work. Return expectations have not come in and as hard is debt is trying to bridge the gap – deals are still tough. For deals that pencil, there will be quite a bit of appetite from the market.

This was my 10th consecutive CREF conference. That seemed like a meaningful milestone. It was so great to see old friends and catch up over a beer (or taco) and talk about how we met and all of our experiences over the past decade. With the lower attendance, the ones that were there were really the dedicated soldiers / lifers of CRE finance. True experts that I have been blessed to come up with and around and learn from. Hearing their perspective and expertise is always a privilege. I also met several new folks and made some new capital relationships that I am extremely excited about. In our business, knowledge is great, but connections are key. I appreciate everyone who took the time to meet with JD Lehman and me. I’m excited about a great and dynamic 2025 in CRE lending!