Arbor Realty Trust Issues Letter to Shareholders - Seite 2

In addition, we have aggregated approximately $650 million of multifamily loans for securitization that are financed with approximately $500 million of debt. These loans are currently being rated by the agencies and with the recent inclusion of CMBS in TALF, we feel confident that we will be able to securitize and distribute this position in the market in the next 90 days.

Federal and State Initiatives

We have been patient in our approach to communication as we were waiting for the dust to settle to properly evaluate not only the impact that the crisis would have on our assets, but even more importantly to properly understand the programs that the federal and state governments implemented and the effects they could have on our business and our customers.

The federal government, Fannie Mae and Freddie Mac have made certain forbearance and non-eviction programs available to borrowers and tenants should they need to counteract any short-term pressure on their properties from COVID-19 and its impact on the economy. To be clear, these mandates are not rent holidays. As to tenants, they merely prohibit eviction proceedings for a three month period. As to borrowers, in order to qualify for a forbearance, they need to demonstrate that they have been adversely affected by the crisis and their ability to make their loan payments has been similarly impacted. Most importantly, all loan and rent payments that are suspended remain the obligations of the borrowers and tenants, respectively, and to date we have received forbearance requests from approximately 2% of our borrowers related to April payments that we are currently evaluating.   

Operating Outlook

We have created a fully integrated diversified operating platform. As a result, we have been very active in providing liquidity to the multifamily market through our sizable agency business. We originated $1.1 billion in agency loans in the first quarter, which is up from $850 million in originations for the first quarter of 2019, and our agency pipeline is up to $1.6 billion compared to $1.2 billion at the same time last year. In this unprecedented environment, our agency platform offers a premium value as it requires limited capital and generates significant, long-dated, predictable income streams. Just as importantly, it allows us to retain our staff and generates significant annual cash flow. Our $20 billion agency servicing portfolio, which is mostly prepayment protected, generates approximately $90 million a year in recurring cash flow, in addition to the strong gain on sale margins we generate from our deep agency origination platform.