NEW YORK -(Dow Jones)- The Federal Reserve on Friday will conduct the last round of purchases of existing commercial mortgages, marking the end of a government program designed to buoy markets and boost investor confidence in securities that have been battered since the financial crisis in 2008.
The end of this part of the Term Asset-Backed Securities Loan Facility, or TALF, leaves a corner of the commercial mortgage market on its own, and investors won’t see new deals until later in the year, when regulators are expected to provide more clarity on securitization.
While the Fed’s role has been small relative to other programs–the central bank has granted only $11 billion in loan requests since last June–the impact has been much larger in a sector still in the throes of a painful correction.
“TALF provided psychological support for the market,” said Darrell Wheeler, head of commercial mortgages at Amherst Securities. “It served its purpose at the time it was needed.”