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Tennessee has temporarily barred a Memphis agency from issuing municipal bonds for housing, saying that it’s suffering from a leadership vacuum while it deals with a high-profile default of debt issued to finance the purchase of two apartment complexes, Bloomberg News reported yesterday. The Memphis Health, Educational and Housing Facility Board hasn’t had an executive director since December and is facing scrutiny over a $12 million bond issue by the Global Ministries Foundation to buy the Warren and Tulane apartments in Memphis. Bloomberg on March 14 reported that the U.S. Department of Housing and and Urban Development cut rent subsidies to more than 1,000 residents because the buildings were infested with roaches and had numerous health and safety violations. The loss of the federal funds caused the securities to default, pushing the price to as little as 21 cents on the dollar.

A planned 900-foot-high condominium tower, a modernist showpiece designed to rival the tallest new Midtown Manhattan residential skyscrapers, landed in bankruptcy court yesterday amid a slowing luxury market, the Wall Street Journal reported today. Developer Joseph Beninati’s Bauhouse Group put the project into chapter 11 protection on Wednesday to try to halt a foreclosure after he was unable to find lenders to refinance short-term loans the group used to acquire land and air rights for the tower on East 58th Street near Sutton Place. Construction has not started. The developer was seeking to block an effort by an investment firm controlled by real-estate investor N. Richard Kalikow from foreclosing on the development. The project faced opposition by local officials and worries by lenders about the increasing risk in financing high-end residential towers. The bankruptcy of the Sutton Place project, and the slowing demand for condos in super-tall Midtown towers on and around West 57th Street, signals a broader unease among banks and other lenders about financing luxury development. The Midtown area has set new benchmarks for Manhattan real estate, including a $100.5 million sale on West 57th Street, sometimes known as Billionaire’s Row. But during the second half of 2015, this portion of the market began to cool as the number of slender towers on the market rose and economic turbulence in much of the world made wealthy international buyers wary.

Fitch Ratings said that defaults on commercial mortgage-backed securities declined for the fifth straight year in 2015, National Mortgage News reported yesterday. The annual default rate fell to 0.4 percent last year, after peaking at 4.1 percent in 2010. The cumulative default rate for CMBS fell to 13 percent from 13.3 percent in 2014. In total, 181 loans defaulted with a balance of $2.7 billion in 2015, compared to 294 loans totaling $3.9 billion in 2014 and 353 loans totaling $5.4 billion in 2013. Most of the new defaults came from the 2005-2007 period when CMBS originations peaked.

JPMorgan Chase & Co. is trying to sell new securities that would pass along most of the credit risk on $1.9 billion in mortgages, in an attempt to revive a debt market that has been largely left to the government since the financial crisis, the Wall Street Journal reported today. The largest U.S. bank by assets is expected to price the residential mortgage-backed deal over the next two weeks. J.P. Morgan would hold 90 percent of the deal by keeping the safest parts, or the most senior tranches, and plans to sell off the riskier pieces to investors. Banks issued trillions of dollars worth of bonds backed by home loans in the years before the financial crisis but have had trouble winning over investors burned when the market crashed. Financial institutions issued $61.6 billion in private mortgage bonds in 2015, up from $54.1 billion in 2014 but a fraction of the $1.19 trillion issued at the peak of the housing boom in 2005, according to data from trade publication Inside Mortgage Finance.

HarborView Towers has filed for chapter 11 protection, attorneys for the Council of Unit Owners at the waterfront property in Federal Hill said yesterday, the Baltimore Business Journal reported. The condo owners in the 30-story development at 100 HarborView Drive filed the petition in U.S. District Court in Baltimore on Wednesday, said Paul Sweeney, an attorney in Columbia that represents the council. One of the main reasons behind the Chapter 11 filing is judgments issued against HarborView Towers over the past couple of years stemming from a bitter legal battle by penthouse resident and developer James Ancel, who charged in a $5 million lawsuit filed in 2010 that water leaks in his unit led to mold growth and a threat to the health and safety of his family. In June 2012, Judge Evelyn Omega Cannon ruled that Ancel was due $1.2 million for the damage to his property. The judge also ordered the condo association to replace the roof system and make other repairs to the building. In a statement issued late Wednesday night, Council of Unit Owners President Reuben Mezrich cited the lawsuit and judgments as the reason for the chapter 11 filing.

To broaden mortgage access, the U.S. government wants to revive the market that brought the economy to its knees, but years of effort haven’t succeeded in rekindling it, the Wall Street Journal reported today. For the eighth straight year, the market for mortgage-backed securities issued by private financial institutions, as opposed to government-backed companies or agencies, was moribund in 2015. The volume of such bonds backed by loans to borrowers with shakier credit histories—known as subprime or Alt-A—fell 36 percent from the previous year to $1.67 billion, according to Inside Mortgage Finance. By comparison, lenders issued $269.1 billion of such bonds in 2003, before the housing boom. Government officials do want private investors to take on a bigger role, and in 2014 the Treasury Department launched an effort with lenders, investors and other mortgage-market participants to diagnose and fix issues restraining the market. An announcement is set for today to outline principles agreed on by many of the major players to lay the groundwork for a new market. Today’s announcement mostly outlines the principles of a “deal agent,” a firm that would look out for investors’ interests as a bond is administered. In the newly created role, the agent would enforce the terms of a mortgage bond and have the power to negotiate changes in terms if needed. Though investors have released the proposal, it will be up to bond issuers and investors to implement the deal agent, which would be paid out of a bond’s proceeds.