CAPMARK FINANCIAL GROUP INC.
(Exact name of registrant as specified in its charter)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The aggregate market value of the registrant's common stock outstanding and held by non-affiliates as of June 30, 2008 was approximately $59,938,534. The registrant's common stock is not traded on a public market. The aggregate market value was determined using the fair market value of a share of common stock as determined by the registrant's board of directors. The board of directors determined that the fair market value of a share of common stock was $5.87 on April 30, 2008. This was the most recent determination of fair market value prior to June 30, 2008. For this purpose, directors, executive officers and greater than 10% record shareholders are considered the affiliates of the registrant.

The registrant had 427,130,631 shares of common stock outstanding on March 31, 2009.

Capmark Financial Group Inc. is a commercial real estate finance company that operates in three core business lines: commercial real estate lending and mortgage banking; investments and funds management; and servicing. Through our operating subsidiaries, we conduct our businesses in North America, Asia and Europe. We provide our borrowers, investors and other customers with commercial real estate financial products and services, which we tailor to our customers' particular needs. When we use the terms the "Company," "we," "us" and "our," we mean Capmark Financial Group Inc. and its consolidated subsidiaries, except where it is clear that such terms mean only Capmark Financial Group Inc.

We originated $10.5 billion and $29.2 billion in aggregate principal amount of financing during the years ended December 31, 2008 and 2007, respectively. Our global primary, master and special servicing portfolio included approximately 49,000 loans with an aggregate outstanding principal balance of $362.1 billion as of December 31, 2008 compared to approximately 55,000 loans with an aggregate outstanding principal balance of $371.7 billion as of December 31, 2007. Real estate-related assets under management were approximately $9.0 billion as of December 31, 2008 compared to $10.3 billion as of December 31, 2007. As of December 31, 2008, our total assets were $20.6 billion and our stockholders' equity was $1.1 billion.

We are a Nevada corporation incorporated on April 17, 1998. Prior to March 23, 2006, we were an indirect wholly-owned subsidiary of GMAC LLC, formerly known as General Motors Acceptance Corporation ("GMAC"). On March 23, 2006, an investor entity owned by affiliates of Kohlberg Kravis Roberts & Co. L.P., Five Mile Capital Partners LLC, Goldman Sachs Capital Partners and Dune Capital Management LP (collectively, the "Sponsors") acquired a controlling equity stake in the Company from a subsidiary of GMAC. As of December 31, 2008, the Sponsors and one other investor owned approximately 75.4 percent of our common stock, our employees, former employees and non-employee directors (collectively, the "Management Stockholders") owned approximately 3.3 percent of our common stock and a subsidiary of GMAC owned approximately 21.3 percent of our common stock. The changes in ownership and the other related transactions that occurred on March 23, 2006 are referred to as the "Sponsor Transactions" in this Annual Report on Form 10-K.

There have been significant negative developments in the financial and capital markets and general business environment worldwide over the past two years. These developments began with credit problems in residential real estate, which led to a lack of liquidity in and depreciation of residential real estate and residential mortgage backed securities. The problems soon extended to disruptions in the credit and capital markets. In addition, the adverse impact of these developments on economic growth and general economic conditions caused the U.S. economy to enter into an economic recession. The bankruptcy filing of Lehman Brothers Holdings Inc., the federal government conservatorship of Fannie Mae and Freddie Mac, JPMorgan Chase & Co.'s acquisition of The Bear Stearns Companies, Inc., JPMorgan Chase & Co.'s acquisition of Washington Mutual Bank, the federal government's significant investment in American International Group, Inc., Bank of America Corp.'s acquisition of Merrill Lynch & Co. Inc., and Wells Fargo & Co.'s acquisition of Wachovia Corp. further eroded confidence and caused further dislocation in the credit and capital markets. In response to deteriorating economic conditions, the commercial real estate markets became significantly weaker in 2008 and the deterioration has continued into 2009.

The current global financial crisis has adversely affected our business and our primary sources of liquidity. The lack of credit available to potential purchasers of our assets and the dislocations in the securitization markets have severely impaired our ability to sell assets in the normal course of business.

We have historically utilized the proceeds from such asset sales as a source of liquidity for new originations and the repayment of debt. The capital markets dislocations, together with the deterioration of our operating results, further described below, have also impaired our ability to obtain alternative means of financing our origination and investment activities through the issuance of short-term or long-term debt or equity capital. In response to these conditions, we have effectively ceased proprietary loan originations and investment activity and shifted our origination activities to those activities where financing remained available, such as lending activities through Capmark Bank, our Utah industrial loan company ("Capmark Bank US"), for the benefit of government-sponsored entities ("GSEs") and other third parties through our correspondent lending relationships. Our ability to continue our business relationships with GSEs and other third parties is based upon agreements that give such GSEs and third parties broad rights to terminate the agreements, including if there is a material adverse event with respect to our Company. The overall reduction in originations has the corresponding effect of reducing our origination fees, the growth of our servicing portfolio and our servicing fee income and limiting our ability to increase our assets under management. In addition, market dislocations and declining real estate values have impaired our ability to profitably dispose of assets in our loan and real estate investment portfolio, eliminating the earnings we have historically obtained from net gains on asset sales.

Our inability to sell our assets has required us to hold a greater portion of our assets on our balance sheet for a longer duration, thereby increasing our credit risk from our lending activities. The negative impact from this increased credit exposure has been exacerbated by the fact that our loans and real estate investments are not performing as expected. The current market conditions have made it difficult for our borrowers to find replacement financing or to sell their properties, which are the typical sources of repayment for commercial mortgage loans. In addition, our borrowers have experienced decreased demand by tenants, decreased cash flows and declining property values. These increasing difficulties have resulted in a deterioration of the credit characteristics of our loan and real estate investment portfolio, adverse risk-rating migration and an increase in non-performing assets. In 2008, we experienced net losses on loans of approximately $1.0 billion, including downward changes in fair value on our portfolio of loans held for sale, and increased provisions for loan losses on our portfolio of loans held for investment by $147.0 million. The carrying value of our originated non-performing loans was $715.3 million as of December 31, 2008. Non-performing loans also rose sharply in the fourth quarter and we expect further increases. A significant additional increase in non-performing loans at Capmark Bank US could adversely affect its capital ratios and regulatory ratings. If Capmark Bank US were to fail to maintain its well-capitalized status or fail to meet other regulatory requirements, the Federal Deposit Insurance Corporation ("FDIC") could prohibit Capmark Bank US from continuing to issue brokered certificates of deposit ("Brokered CDs"), which are its main source of liquidity, and could require our Company to contribute cash or assets to Capmark Bank US under a capital maintenance agreement between our Company and the FDIC.

In addition, our investments and real estate, including those held directly and those held in funds that we manage and in which we co-invest with third parties, experienced net losses of $326.9 million. Our ability to earn incentive fees on current real estate investment funds and raise new investment funds has and may continue to be severely constrained by the current real estate market conditions and the deterioration of the underlying assets.

As a result of our current financial condition, our unsecured corporate credit ratings were reduced to below investment grade by each of the major national credit rating agencies rating those obligations during the first quarter of 2009. These downgrades have had multiple negative effects on our business, including increasing borrowing costs under our bridge loan, senior credit facility and senior notes; requiring us to post collateral to third parties to secure our contractual obligations; and requiring us to seek Fannie Mae's consent to continue our subsidiary's status as an approved Delegated Underwriting and Servicing ("DUS™") seller/servicer, which we are in the process of seeking. These downgrades, coupled with our recent operating results, resulted in a downgrade of our servicer ratings from Fitch

Ratings. Further declines in our servicer ratings may negatively impact the rating of securitizations for which we act as master servicer which may trigger contractual provisions that would permit our termination as servicer under certain of the securitizations for which we act as servicer and a corresponding loss of servicing fee income. In addition, some of our derivative counterparties have ceased trading with us or required changes to margin threshold amounts to reduce their exposure to us. Our inability to maintain derivatives to hedge our interest rate and currency risk could exacerbate our financial condition by adding volatility to our income statement.

During 2008, we focused our efforts on allocating capital effectively and preserving our liquidity position in each of the geographic regions where we operate. As part of these efforts, we curtailed our European lending activities starting in the fourth quarter of 2007 and sold a large portion of our European loan portfolio in April 2008. In July 2008, Capmark Bank Europe, our wholly owned subsidiary, notified the Irish banking regulatory authority that, in connection with our decision to end proprietary lending in Europe, Capmark Bank Europe would commence cessation of its banking operations. In connection with the wind-down of banking activities, Capmark Bank Europe will voluntarily surrender its banking license once it has unwound or transferred to a third party all of the obligations under which it is required to hold a banking license. As of December 31, 2008, Capmark Bank Europe had no outstanding deposit liabilities. We expect that the process of winding down Capmark Bank Europe's banking activities will be completed and the banking license will be relinquished by June 30, 2009. In addition, we have significantly reduced our Asian proprietary lending and investing activities. Our efforts in Asia and Europe are currently focused on managing our existing loan, investment and fee-for-services businesses. During 2008, we also reduced staffing levels to correspond with the decreased level of activities in Europe and Asia. While we continued to originate loans for third parties and GSEs, in light of current market conditions, we also substantially reduced proprietary loan originations in North America and reduced staff to reflect the reduced originations.

In December 2008, we applied to the Board of Governors of the Federal Reserve System ("Federal Reserve") to become a bank holding company and financial holding company. We also applied to participate in the U.S. Department of the Treasury's ("Treasury") Capital Purchase Program ("CPP"). However, in February 2009, after further evaluating the financial and other requirements communicated by the Federal Reserve's staff and our other current priorities, we withdrew such applications. As a result of the withdrawal of our bank holding company application, Capmark Financial Group Inc. is not eligible to participate in the CPP, which is a program pursuant to which the Treasury injects capital into eligible financial institutions through the purchase of preferred stock and warrants to purchase preferred stock, or the Temporary Liquidity Guarantee Program ("TLGP"), pursuant to which the FDIC guarantees senior debt of eligible financial institutions.

As a result of the adverse conditions described above, throughout 2008, we incurred operating losses due principally to fair value adjustments on our loans held for sale, real estate and investment portfolios and an increase in the provision for loan losses on our portfolio of loans held for investment.

The combination of pre-tax operating losses and valuation allowances on our deferred tax assets recognized in the fourth quarter of 2008 have contributed to a significant decline in our stockholders' equity. As a result, our Company was not in compliance with the leverage ratio covenant in our senior credit facility and bridge loan agreement as of the quarter ended December 31, 2008.

In light of adverse market conditions and our operating results as well as the negative effect on our liquidity from the near-term maturity of our bridge loan, we entered into discussions with the lenders under our senior credit facility and bridge loan agreement. These discussions have included negotiating modifications to certain terms of both the senior credit facility and bridge loan agreement. As of April 20, 2009, lenders representing approximately 94% of the outstanding loans under the bridge loan agreement have agreed to extend the maturity date of the bridge loan to May 8, 2009.

Additionally, the required lenders under the senior credit facility and the bridge loan agreement have agreed to waive our compliance with the leverage ratio covenant as of the quarters ended December 31, 2008 and March 31, 2009 and the requirement to deliver our annual audited financial statements within 110 days after year end. These waivers are effective through May 8, 2009.

Unless the lenders under the senior credit facility and bridge loan agreement continue to waive or eliminate the leverage ratio covenant beyond May 8, 2009, further extend the maturity of the bridge loan agreement and otherwise restructure the senior credit facility and bridge loan agreement, upon expiration of the waivers we will be in default under these agreements and the majority lenders under such agreements can immediately declare all loans due and payable. Any such acceleration of the maturity of our debt obligations would permit our senior noteholders and certain other lenders and contractual counterparties to terminate and/or accelerate the maturity of obligations due under other financing instruments and agreements, including our senior notes. If the lenders, noteholders, and/or other counterparties demand immediate repayment of all of our obligations, we would likely be unable to pay all such obligations. In such an event, if we have not otherwise been able to recapitalize, refinance, or raise additional liquidity by selling some or all of our assets or through some other form of restructuring, we will have to seek to reorganize under Chapter 11 of the United States Bankruptcy Code. Due to these conditions and events, substantial doubt exists about our ability to continue as a going concern. Our management believes that access to capital markets is extremely limited in the current economic environment and it is unlikely that we will be able to access new funding sources if we are unable to complete the restructuring of our senior credit facility and bridge loan agreement.

We plan to continue to negotiate with our lenders to complete a restructuring of our senior credit facility and bridge loan agreement. In connection with any restructuring, our lenders are likely to require collateral to secure their loans and increases in the fees and interest rates under the borrowing arrangements. In addition, we are performing a review of all of our businesses, including exploring strategic alternatives for such businesses and implementing significant expense reduction initiatives. We have engaged financial advisors to assist with our efforts to manage expenses and evaluate our strategic alternatives, including debt restructuring alternatives. There is no assurance that we will be able to restructure our borrowing arrangements on acceptable terms, if any, or obtain further waivers to or elimination of our leverage ratio covenant or further maturity extensions to adequately reduce the risk of default under our senior credit facility and bridge loan in the near future.

We continue to actively manage our assets in an effort to reduce our overall debt while maintaining adequate liquidity to support our operations. Further, our management is focused on maintaining appropriate regulatory capital at Capmark Bank US.

The consolidated financial statements contained in this Annual Report on Form 10-K have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The consolidated financial statements do not include any adjustments to reflect possible future effects on the recoverability and classification of assets, or the amounts of liabilities that may result from the outcome of our discussions with the lenders under the senior credit facility and bridge loan agreement, which would affect our ability to continue as a going concern.

We provide financing for commercial properties primarily through our North American Lending and Mortgage Banking segment. Our North American Lending and Mortgage Banking segment operates a lending platform that provides financial products that may be used by real estate owners and developers to finance most types of commercial property, including properties in both traditional asset classes and specialized asset classes. Our financial products have historically included permanent loans, interim and bridge loans, mezzanine loans, construction loans, secured and unsecured lines of credit

and tax credit syndications. In 2008, we ceased our proprietary Asian and European lending activities. We also previously provided financing through our North American Affordable Housing segment until February 2007, when we sold the majority of the assets of that business.

We source new lending opportunities through our commercial mortgage banking network in the United States and through our existing relationships with property owners and developers and other third parties located across the United States. Historically, we have used asset sales, including syndications, participations and securitizations, to transfer some or all of the interests in our loans and other financial products that we originated or acquired in connection with our commercial real estate lending and mortgage banking activities to third parties, including banks, GSEs, insurance companies, investment funds, opportunity funds, third-party conduits and other investors. In recent periods, we have significantly reduced our proprietary lending and focused our efforts on originating loans for third parties and GSEs because market conditions have adversely affected our ability to securitize and syndicate loans and other financial products. In addition, a substantial amount of our loans have been originated through Capmark Bank US due to its access to available funding sources.

We conduct our investments and funds management business through our North American Investments and Funds Management, Asian Operations and European Operations segments. Our North American Investments and Funds Management segment focuses upon the sponsorship and management of real estate debt and equity funds, as well as the management of our own real estate debt and equity investments. Our investments consist of a broad range of debt and real estate equity investments, including mortgage loans and securities, mezzanine loans, commercial mortgage-backed securities ("CMBS"), residential mortgage-backed securities ("RMBS"), real estate investment trust ("REIT") securities and synthetic securities. The investment structures we have historically used for these investments include commingled investment funds and collateralized debt obligations ("CDOs"); direct investments that we make with our own capital; and joint ventures and similar arrangements with other investors in Europe and Asia. In 2008, we ceased making proprietary investments in Europe and Asia and are focused on managing our existing loan, investment and fee-for-services businesses in those segments. Due to market conditions, we reduced our level of new proprietary investments in North America in 2008.

Our investments and funds management business provides us with a recurring source of management fees that are based, in part, on the amount of assets under management or in the case of certain funds that we manage, on the amount of capital commitments from fund investors during the commitment period. In addition, we may earn incentive fees that are calculated based on investment returns and earned when certain thresholds are achieved. When market conditions permit, these activities also provide us with an additional channel for distributing the loans and other financial products that we originate in connection with our commercial real estate lending and mortgage banking business. In addition, these investment activities provide us with a means of directly investing in real estate debt and equity investments; although we are not currently making additional investments other than funding existing commitments.

Our servicing activities involve acting as a master, primary and special servicer of pools of loans that we have securitized or that are securitized by third parties. We also act as a primary servicer of commercial real estate loans that we have originated for our balance sheet or as a correspondent lender. Additionally, we service commercial real estate and other loans that are originated by third parties who outsource the servicing of loans that they originate. To the extent we have retained or acquired a subordinated residual interest in a securitization transaction, we also act as the special servicer for the securitized pool of loans. We conduct our servicing activities across North America,

Asia and Europe through our North American Servicing, Asian Operations and European Operations segments.

We conduct our primary and master servicing business through three central processing centers that are located in Horsham, Pennsylvania, Hyderabad, India and Mullingar, Ireland and regional client relations offices that are located in North America, the United Kingdom, Ireland, Japan and the Philippines. Our special servicing activities are carried out in offices that are located in North America, Europe and Asia.

Our servicing activities provide us with recurring servicing fees that are generally paid throughout the term of a securitization or loan as well as special servicing and asset administration fees that are generally paid after the loan has been designated as a defaulting loan. As master servicer, we are also required to advance primarily principal and interest payments on underlying loans in the securitization pool under specified circumstances. We also earn interest income on any payments advanced. Our North American servicing activities may also generate interest income and trust fees and other forms of economic value that we earn or realize on the escrow balances that borrowers maintain for loans that we service.

For management reporting purposes, we conduct our three core lines of business through six business segments. These business segments, which are organized based on geography and the type of business conducted, consist of: North American Lending and Mortgage Banking, North American Investments and Funds Management, North American Servicing, Asian Operations, European Operations and North American Affordable Housing. We incorporate here by reference financial and other information in Note 26 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

We compete across a variety of business lines within the real estate finance sector, including lending and mortgage banking, investments and funds management and servicing. In carrying out our lending and mortgage banking business, we compete primarily with mortgage companies and other financial services companies specializing in commercial real estate, including Holliday Fenoglio Fowler, L.P., CBRE/Melody, NorthMarq Capital and Wells Fargo, as well as with commercial banks, investment banks, insurance companies and other financial services firms. In carrying out our investments and funds management business, we compete primarily with REITs and other investment advisers and sponsors of investment funds, including NorthStar Realty Finance, Newcastle Investment Corp., Rockpoint, iStar Financial, and Anthracite Capital, Inc., in our levered finance investment activities, and CB Richard Ellis Investors, LLC, AEW Capital Management and The Carlyle Group in our real estate equity investment activities. In carrying out our servicing business, we compete primarily with other mortgage servicing companies, including Wachovia Bank, Midland Loan Services, Inc., Wells Fargo, KeyBank Real Estate Capital, Bank of America, Hatfield Philips International, LNR Partners, Inc., CWCapital LLC and Centerline Servicing Inc.

We compete in each of our business lines based on pricing, terms, structure and service. Our competitors seek to compete aggressively on the basis of these factors and we could lose market share to the extent we are unwilling to match our competitors' pricing, terms and structure due to our desire to maintain interest margins, credit standards, the economic capital analysis we apply to our business or any combination of the foregoing. To the extent that we match competitors' pricing, terms or structure, we might experience decreased profit margins and increased risks of loss. Some of our competitors are large companies or large financial institutions that have substantial capital and technological and marketing resources, some of which are larger than us and may have greater access to capital at a lower cost than we do, including access to funding provided by the U.S. government through the Treasury's Troubled Asset Relief Program ("TARP"), the TLGP or other programs.

Our core business lines are subject to regulation and supervision in a number of jurisdictions. The level of regulation and supervision to which we are subject varies from jurisdiction to jurisdiction and is based on the type of business activities involved. The regulatory and legal requirements that apply to our activities are subject to change from time to time and may become more restrictive, making our compliance with applicable requirements more difficult or expensive or otherwise restricting our ability to conduct our businesses in the manner that they are now conducted. Changes in applicable regulatory and legal requirements, including changes in their enforcement, could materially and adversely affect our business and our financial condition and results of operations.

Our commercial real estate lending and mortgage banking and servicing businesses are subject, in certain instances, to supervision and regulation by federal and state governmental authorities in the United States and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things, regulate lending activities; regulate conduct with borrowers; establish maximum interest rates, finance charges and other charges; and require disclosures to borrowers. Although most states do not regulate commercial finance, certain states impose limitations on interest rates and other charges and on certain collection practices and creditor remedies and require licensing of lenders and adequate disclosure of certain contract terms. We are also required to comply with certain provisions of the following laws and regulations that are applicable to commercial loans: the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act, the Gramm-Leach-Bliley Act, the Flood Disaster Protection Act, the Bank Secrecy Act, the USA PATRIOT Act, regulations promulgated by the Office of Foreign Asset Control, the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") and federal and state securities laws and regulations.

To maintain the status of certain of our subsidiaries as approved seller/servicer for Fannie Mae and Freddie Mac, as an approved Federal Housing Administration ("FHA") mortgagee and Multifamily Accelerated Processing ("MAP") lender by the U.S. Department of Housing and Urban Development ("HUD") and as an issuer and servicer of mortgage-backed securities ("MBS") guaranteed by Ginnie Mae, we are required to meet and maintain entity-level eligibility criteria from time to time established by each GSE and agency, in their sole discretion, including but not limited to, minimum net worth and capital requirements and compliance with reporting requirements. For our loans to remain eligible for sale to Fannie Mae or Freddie Mac or to qualify for FHA mortgage insurance or for us to remain an approved issuer of Ginnie Mae MBS, we are required to originate our loans and perform our loan servicing functions in accordance with the applicable program requirements and guidelines from time to time established by the respective GSE or agency. If we fail to comply with the requirements of any of these programs, the relevant GSE or agency may terminate or withdraw our approval and we would no longer be able to sell loans to Fannie Mae or Freddie Mac, to fund mortgage loans with FHA mortgage insurance or to sell FHA-insured mortgage loans as an issuer of Ginnie Mae MBS. In addition, Fannie Mae, Freddie Mac and Ginnie Mae have the authority under their guidelines to terminate a lender's right to service their loans or, in the case of Ginnie Mae, the issuer's right to service mortgage loans backing the MBS guaranteed by Ginnie Mae. The loss of one or more of these approvals could have a material adverse impact on our operations, including the termination of other agreements by third parties. In addition, to the extent we are exempt from licensing in certain states because of our status as an approved Fannie Mae or Freddie Mac lender or approved FHA mortgagee, we may be required to obtain additional state lender or mortgage banker licenses in order to continue to originate loans in those states if we no longer qualify for an exemption from licensing.

As a result of the recent downgrades of our credit ratings, we were required to seek Fannie Mae's consent to continue our subsidiary's status as an approved DUS™ seller/servicer, in particular to meet the "DUS Entity" qualifications. A "DUS Entity" is defined by Fannie Mae as "a legal entity whose business is limited to Fannie Mae DUS, Freddie Mac (non-recourse transactions only), FHA, or any non-recourse origination, selling, servicing, financial advisory activity and other business approved by Fannie Mae." We are in the process of seeking Fannie Mae's consent to continue our ability to engage in business activities other than the activities permitted for a DUS Entity, but it is possible that the consent will not be granted and that Fannie Mae will terminate our subsidiary's DUS™ seller/servicer status.

As noted above, each of the GSEs has financial reporting requirements. Although the GSEs require us to provide audited financial statements generally within 90 days after the end of each fiscal year, each has agreed to provide us a one-time 30-day extension of the filing deadlines. Each GSE or government agency retains broad discretion to terminate its arrangements with Capmark Finance Inc. as a seller/servicer without cause upon notice.

Capmark Bank US and Escrow Bank are Utah state chartered industrial loan corporations or industrial banks and are subject to comprehensive regulation and periodic examination by the Utah Department of Financial Institutions and the FDIC. Capmark Bank US has deposits that are eligible for insurance by the FDIC in accordance with FDIC rules. Since June 20, 2008, Escrow Bank has not been actively engaged in banking operations and its FDIC deposit insurance will be terminated effective June 30, 2009. Once the deposit insurance is terminated, Escrow Bank intends to wind-up and dissolve. Until the termination of deposit insurance is effective, Escrow Bank remains subject to regulation and periodic examination by the FDIC and must comply with applicable capital adequacy requirements.

Regulatory restrictions require that our U.S. banking subsidiaries comply with capital rules of the FDIC. The Federal Deposit Insurance Corporation Improvement Act of 1991 or "FDICIA" requires the federal regulators to take prompt corrective action against any undercapitalized institution. FDICIA establishes five capital categories: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Well-capitalized institutions significantly exceed the required minimum level for each relevant capital measure. Adequately capitalized institutions include depository institutions that meet but do not significantly exceed the required minimum level for each relevant capital measure. Undercapitalized institutions consist of those that fail to meet the required minimum level for one or more relevant capital measures. Significantly undercapitalized characterizes depository institutions with capital levels significantly below the minimum requirements for any relevant capital measure. Critically undercapitalized refers to depository institutions with minimal capital and at serious risk for government seizure.

Under certain circumstances, a well-capitalized, adequately capitalized or undercapitalized institution may be treated as if the institution were in the next lower capital category. A depository institution is generally prohibited from making capital distributions, including paying dividends, or paying management fees to a holding company if the institution would thereafter be undercapitalized. Institutions that are adequately capitalized but not well-capitalized cannot accept, renew or roll over Brokered CDs except with a waiver from the FDIC and are subject to restrictions on the interest rates that can be paid on such deposits. Undercapitalized institutions may not accept, renew or roll over Brokered CDs.

The federal bank regulatory agencies are permitted or, in certain cases, required to take certain actions with respect to institutions falling within one of the three undercapitalized categories.

Depending on the level of an institution's capital, the agency's corrective powers include, among other things:

If the FDIC is appointed the conservator or receiver of an insured depository institution, upon its insolvency or in certain other events, the FDIC has the power: (1) to transfer any of the depository institution's assets and liabilities to a new obligor without the approval of the depository institution's creditors; (2) to enforce the terms of the depository institution's contracts pursuant to their terms; or (3) to repudiate or disaffirm any contract or lease to which the depository institution is a party, the performance of which is determined by the FDIC to be burdensome and the disaffirmance or repudiation of which is determined by the FDIC to promote the orderly administration of the depository institution.

In connection with the Sponsor Transactions, we entered into a capital maintenance agreement with the FDIC that would require us to contribute cash or other assets acceptable to the FDIC to Capmark Bank US and Escrow Bank if either institution falls below "well capitalized" status or its Tier 1 leverage ratio falls below 8.0%. Any required payments pursuant to the capital maintenance agreement are entitled to a priority of payment over the claims of other creditors in a bankruptcy of our Company.

The following table summarizes the FDIC's well-capitalized ratio requirements and our U.S. banks' regulatory capital ratios as of the dates indicated.

Capmark Bank US and Escrow Bank are also subject to certain restrictions imposed by federal law on their extensions of credit to, and certain other transactions with, our Company and other affiliates and on investments in stock or securities of our Company and those affiliates. These restrictions

prevent us and our affiliates from borrowing from Capmark Bank US or Escrow Bank unless the loans are secured in specified amounts. Capmark Bank US and Escrow Bank are also subject to regulation under the Bank Secrecy Act, the USA PATRIOT Act and Regulation O of the Federal Reserve. Neither bank, however, is considered a "bank" for the purposes of the Bank Holding Company Act.

Capmark Bank US has received approval from the FDIC to exercise trust powers and, as of June 20, 2008, we have migrated our primary trust operations from Escrow Bank to Capmark Bank US. We do not anticipate this change will materially impact our results of operations or financial condition.

Capmark Bank US must pay applicable FDIC insurance premiums with respect to its deposits that are eligible for FDIC insurance. In November 2006, the FDIC issued final regulations, as required by the Federal Deposit Insurance Reform Act of 2005, by which the FDIC established a new base rate schedule for the assessment of deposit insurance premiums and set new assessment rates that became effective in January 2007. Under these regulations, each depository institution is assigned to a risk category based upon capital and supervisory measures. Depending upon the risk category to which it is assigned, the depository institution is then assessed insurance premiums based upon its deposits. Escrow Bank no longer pays FDIC insurance premiums because it has no eligible deposits.

After the passage of the Emergency Economic Stabilization Act of 2008 (the "EESA"), the FDIC also increased deposit insurance for all deposit accounts up to $250,000 per account as of October 3, 2008 and ending December 31, 2009. Effective April 1, 2009, the FDIC changed the way its assessment system differentiates for risk, making corresponding changes to assessment rates beginning with the second quarter of 2009, and made certain technical and other changes to these rules. The increase in deposit insurance described above, as well as the recent increase and anticipated additional increase in the number of bank failures, is expected to result in an increase in deposit insurance assessments for all banks, including Capmark Bank US. The FDIC is required by law to return the insurance reserve ratio to a 1.15 percent ratio no later than the end of 2013. Recent failures caused that ratio to fall to 0.76 percent as of September 30, 2008.

As FDIC-insured depository institutions, our U.S. bank subsidiaries may be held liable for any loss incurred or expected to be incurred by the FDIC in connection with another FDIC-insured institution under common control with the institution in "default" or "in danger of default." This liability is commonly referred to as "cross-guarantee" liability. A "default" is generally defined as the appointment of a conservator or receiver and "in danger of default" is defined as certain conditions indicating that a default is likely to occur absent regulatory assistance. An FDIC cross-guarantee claim against a depository institution is generally senior in right of payment to claims of the holding company and its affiliates against the depository institution.

Turmoil in the nation's financial sector during 2008 resulted in the passage of the EESA and the adoption of several programs by the Treasury, as well as several actions by the Federal Reserve. One such program under the TARP was action by the Treasury to make significant investments in U.S. financial institutions through the CPP. Capmark Bank US has applied to participate in the CPP and its application is under review by the FDIC. Participation by Capmark Bank US in the CPP is subject to, among other things, the discretion of the FDIC and the Treasury. If Capmark Bank US were to participate in the CPP, we and Capmark Bank US would be required to comply in all respects with the EESA and the rules and regulations thereunder, including those with respect to the compensation arrangements for our senior executive officers.

On November 21, 2008, following a determination by the Secretary of the Treasury that systemic risk existed in the nation's financial sector, the FDIC Board of Directors adopted the TLGP, which guarantees newly issued senior unsecured debt of banks, thrifts, and certain holding companies, and provides full coverage of noninterest-bearing deposit transaction accounts, regardless of dollar amount. Capmark Bank US may be eligible to participate in the guarantee of newly issued senior unsecured debt, but Capmark Bank US currently does not plan to issue any senior unsecured debt under the TLGP.

In recent years, the United States Congress has considered legislation which if passed would subject companies, such as us, that own industrial banks, referred to as "industrial bank holding companies" to regulation by the FDIC. It is reasonable to expect that Congress will in the future consider legislation that may affect the regulatory scheme applicable to industrial bank holding companies, either independently or as part of new laws applicable to financial institutions in general. The impact of any such legislation on us cannot be predicted at this time but could have a material impact on the manner in which we conduct our business or on our ownership structure. In addition, the Utah Department of Financial Institutions has notified Capmark Bank US that it has implemented a holding company supervision program intended to assess the degree to which the holding company serves as a source of financial and managerial strength to its Utah banks. The Utah Department of Financial Institutions indicated that it intends to conduct periodic on-site source of strength assessments and will evaluate financial strength (including capital, earnings and liquidity), the risks of the holding company organizational structure and risk management practices. The new supervisory program is being implemented under existing statutory authority and will supplement the existing examination activities of the Utah Department of Financial Institutions and the FDIC. See "Risk Factors—Our business may be adversely affected by the regulated environment in which we operate and by governmental policies."

We conduct capital markets activities in the United States through Capmark Securities Inc., which is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and with state securities commissions in the United States under state securities laws. Capmark Securities Inc. is also a member of the Financial Industry Regulatory Authority ("FINRA") and, accordingly, is subject to its rules and regulations. A registered broker-dealer is subject to laws and regulations covering all aspects of the securities business, including sales and trading practices, public offerings, use of customers' funds and securities, capital structure, record keeping and retention and the conduct of its directors, officers, employees and other associated persons. A broker-dealer is also regulated by securities administrators in those states where it does business. Violations of the laws and regulations governing a broker-dealer's actions could result in censures, fines, the issuance of cease-and-desist orders, revocation of licenses or registrations, the suspension or expulsion from the securities industry of the broker-dealer or its officers or employees or other similar consequences by both federal and state securities administrators. Imposition of any of these sanctions on us could impair our ability to distribute our real estate securities in the United States and to promote a secondary market in those securities.

We conduct our investments and funds management business in the United States through Capmark Investments LP, which is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940. A registered investment adviser is subject to federal and state laws and regulations primarily intended to benefit the investor or client of the adviser. These laws and regulations include requirements relating to, among other things, fiduciary duties to clients, maintaining an effective compliance program, solicitation agreements, conflicts of interest, record keeping and reporting requirements, disclosure requirements, limitations on cross-agency and principal transactions between an investment adviser and its advisory clients and general anti-fraud prohibitions. In addition, these laws and regulations generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict us from conducting our advisory activities in the event we fail to comply with those laws and regulations. Sanctions that may be imposed for a failure to comply with applicable legal requirements include the suspension of individual employees, limitations on our engaging in various advisory activities for specified periods of time, the revocation of registrations, other censures and fines.

We conduct the majority of our operations in Asia principally through our offices in Japan. Our business in Japan is subject to extensive laws, rules and regulations and judicial and administrative decisions that impose requirements and restrictions on our activities. These laws, rules and regulations include money laundering laws, laws concerning the regulation of receiving capital subscriptions, deposits and interest on deposits, laws restricting interest rates that may be charged on borrowings, laws protecting personal information, laws concerning building lots and buildings, securities laws, laws relating to business trusts, laws regulating real estate syndication businesses, laws governing the servicing of loans and various rules and regulations issued thereunder. Among other things, these laws, rules and regulations impose licensing obligations and financial requirements on us, limit the interest rates, finance charges and other fees that we may charge or pay, regulate the use of credit reports and the reporting of credit information, prohibit discrimination, mandate disclosures and notices to consumers, mandate the collection and reporting of statistical data regarding our customers, regulate our marketing techniques and practices, require us to safeguard non-public information about our customers and regulate our servicing practices, including the assessment, collection, foreclosure, claims handling and investment and interest payments on escrow accounts. The Financial Instruments and Exchange Law ("FIEL") came into effect on September 30, 2007. FIEL expands the scope of regulated products and services and requires registration for, among other activities, investment advisory and investment management services. In December 2008, we obtained an investment management registration for one of our Japanese subsidiaries in compliance with FIEL.

We have originated and funded substantially all of our commercial real estate loans in Europe through our subsidiary Capmark Bank Europe. Capmark Bank Europe is licensed and regulated by the Irish Financial Regulator, the Irish bank regulatory authority, as an Irish bank and is permitted to conduct banking activities in most European jurisdictions under European Union "passporting" rules. These rules permit financial institutions that are regulated in one member state to conduct banking activities in another member state without obtaining a local license provided that certain notification procedures are followed. We have provided authorities in fourteen countries in Europe with appropriate passporting notifications and are permitted to engage in lending activities in those countries under our Irish banking license. We are also permitted to carry out lending activities in the United Kingdom. As noted above, we are no longer engaged in proprietary lending activities in Europe.

As an Irish bank, Capmark Bank Europe is required to comply with various laws, rules and regulations in Ireland, including administrative notices implementing European Union Directives relating to business activities carried out by credit institutions and supplementary requirements and standards that are from time to time established by financial regulators. These requirements, among other things, require us to ensure that Capmark Bank Europe maintains certain capital adequacy and liquidity ratios and to file regulatory returns with the Irish Financial Regulator evidencing compliance with those ratios on a monthly, quarterly, semi-annual and annual basis. We are also required to ensure that Capmark Bank Europe complies with the Irish Financial Regulator's interpretation of the Basel II accord, which sets forth the recommendations of the Basel Committee on Banking Supervision for establishing international standards for measuring the capital adequacy of banks. The Basel II accord addresses, among other things, the manner in which capital adequacy requirements should be measured, enforced and disclosed.

As a result of the curtailment of our European lending activity starting in late 2007, we have informed the Irish Financial Regulator that we intend to relinquish our Irish banking license. The termination of our Irish banking license would allow us to redeploy the capital currently held by Capmark Bank Europe and eliminate Irish bank regulatory reporting obligations. We currently intend to surrender our Irish banking license by June 30, 2009.

The following table summarizes Capmark Bank Europe's regulatory capital ratios as of the periods indicated:

In connection with the Sponsor Transactions, on March 23, 2006, we provided the Irish Financial Regulator with a letter of comfort with respect to Capmark Bank Europe replacing a letter of comfort provided by GMAC. Our comfort letter advised the Irish Financial Regulator that it is our policy to ensure, and that we will ensure, the ability of Capmark Bank Europe to meet all of its liabilities as they become due for so long as we continue to be the majority equity holder of Capmark Bank Europe.

We hold various service marks, trademarks and trade names including the "Capmark" name and we have developed proprietary technology to service our customers. In connection with the sale of all of the stock of our former technology subsidiary, EnableUs, Inc., in April 2007, we entered into an agreement under which EnableUs, Inc. will provide us hosted information technology services for our servicing operations. The agreement has an initial term of three years with a right to renew for up to two additional years. Under the agreement, we also received an irrevocable, perpetual, royalty-free license to use, modify and support the current EnableUs servicing software for internal purposes. The EnableUs software is an important component of the information technology platform for our servicing operations. We also license other software products to support our businesses. Other than the servicing software that we license from EnableUs, Inc. and the "Capmark" service mark, we believe that our other intellectual property rights could be replaced with commercially available alternatives in the event of the termination, expiration or loss of such rights. However, any such loss could result in higher costs related to purchasing, licensing or deploying replacement intellectual property rights.

As of December 31, 2008, we had more than 1,900 employees worldwide. None of our employees is represented by a union or covered by a collective bargaining agreement. We believe that our relations with our employees are good.

Our Web site address is www.capmark.com. We make available through this address, without charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after they are electronically filed or furnished to the SEC. You may also read and copy any document we file with the SEC at the SEC's public reference room, located at 100 F Street, N.E. Room 1580, Washington, D.C. 20549.

We face a variety of risks that are substantial and inherent in our businesses, including liquidity, credit, market, operational, legal and regulatory risks. The following are some of the more important factors that could affect our businesses.

Our independent registered public accounting firm has concluded that substantial doubt exists about our ability to continue as a going concern as a result of our net losses and breach of financial covenants in certain of our borrowing arrangements.

In 2008, we were adversely affected by the unprecedented global financial crisis and economic downturn. The combination of pre-tax operating losses and valuation allowances on our deferred tax assets during the fourth quarter of 2008 contributed to our noncompliance with the leverage ratio covenant in our senior credit facility and bridge loan agreement as of December 31, 2008. As of April 20, 2008, lenders representing approximately 94% of the outstanding loans under the bridge loan agreement have agreed to extend the maturity date to May 8, 2009. Additionally, the required lenders under the senior credit facility and the bridge loan agreement have agreed to waive, through May 8, 2009, our compliance with the leverage ratio covenant as of December 31, 2008 and March 31, 2009 and the requirement to deliver our annual audited financial statements within 110 days after year end.

We are currently in discussions with the lenders under the senior credit facility and bridge loan agreement to negotiate modifications to certain terms of both the senior credit facility and bridge loan agreement. In connection with any amendments, our lenders will likely require collateral to secure their loans and increases in the fees and interest rates under the borrowing arrangements. Unless the lenders under the senior credit facility and bridge loan agreement continue to waive or eliminate the leverage ratio covenant beyond May 8, 2009, further extend the maturity of the bridge loan agreement and otherwise restructure the senior credit and bridge loan agreement, upon expiration of the waivers currently in effect, we will be in default under those agreements and the majority lenders under such agreements can immediately declare all loans due and payable. Any such acceleration of the maturity of our debt obligations would likely cause our senior noteholders and other lenders and contractual counterparties to terminate and/or accelerate the maturity of obligations due under other financing instruments and agreements. If the lenders, noteholders, and/or other counterparties demand immediate repayment of all of our obligations to them, we would likely be unable to pay all such obligations. In such an event, if we have not otherwise been able to recapitalize, refinance, or raise additional liquidity by selling some or all of our assets we will have to seek reorganization under Chapter 11 of the United States Bankruptcy Code.

The consolidated financial statements included in this Annual Report on Form 10-K have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. However, our registered independent public accounting firm concluded in its report that there is substantial doubt about our ability continue as a going concern as a result of the conditions noted above.

Our liquidity and financial condition have been and could continue to be adversely affected by current market and economic conditions.

Our ability to access the capital markets and other sources of secured and unsecured funding, which is critical to our ability to do business, has been severely constrained by recent events in the global markets and in the economy as well as by the recent deterioration in our financial condition. As described in "Business—Global Financial Crisis" in Item 1 of this Annual Report on Form 10-K, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook and Recent Trends" in Item 7 of this Annual Report on Form 10-K, global market and economic conditions have been, and continue to be, disrupted and volatile to an unprecedented extent. As a result, our ability to effectively monetize our available for sale loan and investment portfolios and to access the capital markets and other sources of funding has been severely constrained or eliminated.

The deterioration in our financial performance and the recent downgrade in our credit ratings have further limited our access to capital, required us to provide additional collateral to support certain of our third-party obligations and increased our cost of funding under our senior credit facility, bridge loan and senior notes. As a result, it is possible that we will be unable to meet our future liquidity requirements.

During 2008, the results of our operations were adversely affected by the unprecedented global financial crisis and economic downturn. The combination of pre-tax operating losses and the establishment of valuation allowances on our deferred tax assets during the fourth quarter of 2008 contributed to noncompliance with the leverage ratio covenant in our senior credit facility and bridge loan agreement as of the quarter ended December 31, 2008. As a result, we were forced to seek waivers of the leverage ratio covenant under our senior credit facility and bridge loan to avoid a potential default under such agreements. Our senior credit facility and bridge loan agreement had a total of $6.2 billion outstanding as of December 31, 2008. We received waivers of the leverage ratio covenant which are effective through May 8, 2009. If we are unable to extend such waivers beyond May 8, 2009 or otherwise restructure our senior credit facility and bridge loan, we will be in default under such agreements and the lenders will be permitted to declare their loans immediately due and payable. In such event, it is likely that we would not have the liquidity to repay the accelerated debt. Accordingly, if we have not otherwise been able to recapitalize, refinance, or raise additional liquidity by selling some or all of our assets we will have to seek reorganization under Chapter 11 of the United States Bankruptcy Code.

Our business is significantly affected by general business, economic and cyclical market conditions, particularly in the commercial real estate industry, and accordingly, our business has been and could continue to be harmed in the event of a prolonged economic slowdown or recession or a market downturn or disruption.

Our business and earnings are sensitive to general business, economic and market conditions in the United States and in the various foreign markets in which we operate, including Japan, where the majority of assets in our Asian operations are located. These conditions include changes in government policies and regulations and changes in short-term and long-term interest rates, inflation, deflation, fluctuations in the real estate and debt capital markets and developments in national and local economies. The commercial real estate industry is cyclical and is subject to numerous economic factors including general business conditions, changes in interest rates, inflation and oversupply of properties. The recent recessionary changes in the economic conditions in the regions in which we conduct operations have had an adverse effect on our business, including decreasing the demand for the loans and other products and services we offer; reducing the value of loans and other real estate-related assets that we hold or manage and the collateral supporting our loan portfolio; and significantly reducing our ability to monetize our available for sale loan and investment portfolios. In addition, the foregoing factors have caused the number of our borrowers and counterparties who become delinquent,

file for protection under bankruptcy laws or default on their loans or other obligations to begin to increase. This increase in the number of delinquencies, bankruptcies or defaults has resulted and could continue to result in a higher level of originated non-performing assets, net charge-offs, provisions for loan losses and valuation adjustments on our owned or managed real estate-related assets, which has and could continue to adversely affect our results of operations.

Developments in the debt capital markets have adversely affected and may continue to adversely affect our results of operations and financial condition.

The recent global financial crisis has led to a severe dislocation in the debt capital markets, including sources of liquidity that we utilize, such as securitizations and other sales of commercial mortgage loans, real estate investments and other assets and unsecured and secured debt financing arrangements. We have experienced and expect to continue to experience the following negative effects from that dislocation:

As a result of the foregoing factors, our overall loan origination level has been and will continue to be reduced, the types of loans that we are able to originate has been and will continue to be constrained and our ability to increase our assets under management has been and may continue to be constrained, resulting in a corresponding reduction in our interest and fee income. We will continue to be adversely affected by a continuation or worsening of disruptions in the debt capital markets.

We require substantial amounts of capital to fund our operations. If we are unable to maintain adequate funding on acceptable terms, our results of operations and financial condition could suffer and we could face difficulty in operating our business and may need to seek some form of reorganization.

We require substantial amounts of capital to support our operations and growth plans. Our primary sources of liquidity have consisted of cash from operating activities, existing unrestricted cash on our balance sheet, sales of assets, bank financing, capital markets financing and other financing arrangements, deposit funding obtained by Capmark Bank US and repayments of loans and other assets that we hold on our balance sheet. As of October 2008, we had drawn substantially all the funds available under our senior credit facility. As described in "Business—Global Financial Crisis" and

"Business—Going Concern Considerations" of this Annual Report on Form 10-K, the global financial crisis has adversely affected our business and our primary sources of liquidity.

If we have not otherwise been able to recapitalize, refinance, or raise additional liquidity by selling some or all of our assets or through some other form of restructuring, we will have to seek reorganization under Chapter 11 of the United States Bankruptcy Code.

Our senior credit facility, our bridge loan, our notes and other financing arrangements contain restrictions that may limit our flexibility or adversely affect our business.

In order to continue to be in compliance with the covenants in our financing arrangements, our management may have to make certain adjustments to our operating strategy. These restrictions may have an adverse impact on our earnings or limit our ability to obtain liquidity through asset sales, raising secured financing or otherwise.

Our senior credit facility, our bridge loan, our notes and other financing arrangements impose, and the terms of our future indebtedness may impose, operating and other restrictions on us and our subsidiaries. Those restrictions affect or will affect, and in many respects limit or prohibit, among other things, our ability and the ability of our subsidiaries to:

We have suffered adverse consequences as a result of downgrades of our credit ratings, and future downgrades could result in further adverse impacts.

Our ability to effectively compete for financing in our industry is based, in part, on our credit ratings, which affect the availability of financing and the cost of our capital. Factors that are significant to the determination of our credit ratings or otherwise affect our ability to raise financing include the level and volatility of our earnings, our level of leverage, conditions in the debt capital markets and real estate markets, our relative competitive position, our risk management policies, our cash liquidity, our capital adequacy, our ability to retain key personnel, and legal, regulatory and tax developments. In the first quarter of 2009, our unsecured corporate credit ratings were reduced to below investment grade by each of the major national credit rating agencies rating those obligations. In April 2009, our unsecured corporate credit ratings were further downgraded by one credit rating agency. These downgrades have further limited our ability to access financing and increased our borrowing costs.

In addition, as a result of the recent downgrades, we were required to post collateral to third parties to secure our contractual obligations, including agreements with Fannie Mae, and certain other counterparties terminated their derivative trading with us. The downgrades in our credit ratings have also negatively impacted our servicer rating from Fitch Ratings and further servicer rating downgrades may negatively impact the rating of securitizations for which we act as master servicer. Such declines in servicer ratings in certain circumstances may give trustees of the securitizations that we service the ability to terminate us as servicer. The loss of a significant number of our servicing contracts could adversely impact our results of operations, financial condition and business prospects. Further downgrades could have additional adverse consequences on our business.

Our reserve for loan losses may prove inadequate, which could have a material adverse effect on our financial results.

We maintain an allowance for loan losses on our loans held for investment. We conduct a comprehensive review of these reserves on a quarterly basis. Our reserves reflect management's current judgment of the probability and severity of losses within our portfolio. However, estimation of ultimate loan losses, loss expenses and loss reserves is a complex process and it is possible that management's judgments will prove to be incorrect and that reserves will be inadequate over time to protect against future losses. Such losses could be caused by factors including, but not limited to, unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers or industries or markets in which borrowers operate or in which their assets are located. Our nonperforming loans have increased materially through 2008, driven by the worsening economy and the disruption in the credit markets, which have adversely impacted the ability of many of our borrowers to service their debt and refinance our loans to them at maturity. If our reserves for loan losses prove inadequate we may suffer losses which could have a material adverse effect on our financial performance and results of operations.

Changes in prevailing interest rates, credit spreads and credit availability have and may continue to adversely affect our results of operations and financial condition.

Our results of operations and financial condition have and may continue to be directly affected by changes in prevailing interest rates, credit spreads and credit availability. In particular, an increase in interest rates, a widening of credit spreads or a decrease in the availability of debt financing for real estate-related assets or corporate borrowers has and could, among other things:

Conversely, a decrease in interest rates will reduce our earnings on escrow balances in connection with our servicing activities. In addition, a narrowing of credit spreads may lead to prepayments on loans we own after any applicable lock-out periods have expired. When prepayments occur, we may not be able to reinvest the proceeds in instruments that bear the same effective yield as the loans being prepaid.

A significant change in interest rates could also result in collateral being placed with our derivative counterparties as a result of declines in the fair value of our derivative instruments executed in connection with our hedging activities. We negotiate and execute industry standard agreements that govern the maximum credit exposure that can be assumed by our derivative counterparties in respect of their derivative agreements with us. When this credit limit is exceeded, our counterparty will require us to make cash payments to bring their exposure within the specified maximum exposure limit. These collateral requirements (which are commonly referred to as "margin calls") could adversely affect our ability to fund our operations.

Our business outside the United States exposes us to additional risks, including foreign currency exchange rate risks, that may adversely affect our results of operations.

We conduct a portion of our business outside the United States. Our international operations generate income and expenses and give rise to assets and liabilities denominated in currencies other than the U.S. dollar. If not adequately hedged, fluctuations in these currencies may adversely affect our earnings and the values of certain of our assets and liabilities. In addition, our international operations, including significant operations in Japan, subject us to additional risks. These risks include:

In particular, we have significant operations in Japan that subject us to the above risks to the extent that the geographic region is affected by any of the above factors. The effects of these risks may, individually or in the aggregate, adversely affect our results of operations.

Our efforts to mitigate risks relating to changes in interest rates, credit spreads and foreign currency exchange rates may not be successful and may expose us to additional types of risks.

We employ various economic hedging strategies with the objective of mitigating the market risks that are inherent in our business and operations. These risks include the risks that changes in prevailing interest rates, credit spreads or foreign currency exchange rates will impact the fair value of our assets, including our loans, investment securities and mortgage servicing rights, decrease our levels of income or increase our expenses. We seek to control these risks by, among other things, purchasing or selling U.S. Treasury securities and entering into a number of derivative instruments, including total rate of return swaps, CMBS index swaps, interest rate or foreign exchange swaps, interest rate caps and floors and options to purchase the foregoing items.

Developing an effective strategy for dealing with movements in interest rates, credit spreads and foreign currency exchange rates is complex, and no strategy can completely insulate us from risks associated with those fluctuations. Our hedging strategies also rely on assumptions and projections regarding our assets, general market factors and the credit worthiness of our counterparties that may prove to be incorrect or prove to be inadequate. Accordingly, our hedging activities may not have the desired beneficial impact on our results of operations or financial condition. Poorly designed strategies or improperly executed transactions could actually increase our risk of loss. If we terminate a hedging arrangement, we may also be required to pay additional costs, such as transaction fees or breakage costs. There have been periods in the past, and it is likely that there will be periods in the future, during which we have incurred or may incur losses on transactions after taking into account our hedging strategies. As a result of our financial condition, hedging counterparties have and could in the future require higher fees and more collateral than we are willing or able to provide or discontinue hedging transactions with us and as a result, we may be unwilling or unable to fully hedge interest rate or currency risks and in such event changes in interest rates or currency exchange rates could result in additional volatility in our results of operations, which may have a material adverse effect on our results of operations and financial condition.

We may suffer a loss if the value of property or other assets securing loans that we hold for sale or investment deteriorates.

Our loans are generally non-recourse and we generally are not entitled to seek recovery from the borrower in the event of a payment default, except in the case of certain construction loans and instances of fraud or other bad acts by the borrower and breaches of certain representations and covenants. Accordingly, the cash flows generated by the operation, sale or refinancing of the properties securing our loans typically are the sole sources of funds for the payment of principal and interest that is due under our loans. A borrower's ability to successfully operate, refinance or sell a mortgaged property may be affected by a number of factors, including the ability of the borrower to fully lease the property on terms sufficient to support the debt; levels of operating costs for operating the properties; competition; litigation involving the property owner or the property; changes in local, regional or national economic, business and market conditions or forecasts; changes in the availability or cost of financing for real estate; uninsured losses to the property and other factors including those that are outside the control of the borrower.

Our loan portfolio is significantly comprised of construction loans and interim, floating rate loans secured by "transitional" real estate. The repayment of such loans is dependent on the construction and renovation, and subsequent leasing, of collateral and debt service payments for such loans are dependent on capitalized reserves or subsidization by sponsors. Reductions in demand by users of commercial real estate have caused certain of these loans to fail to achieve underwritten expectations for leasing and cash flow, contributing to increases in defaults and non-performing loan classifications. In the case of a mezzanine loan, the collateral that secures the borrower's obligations generally consists of a pledge of the borrower's equity interests in the entity that owns the financed property rather than

a mortgage over the property itself. Our mezzanine loans are therefore subject to the additional risk that other lenders may be able to foreclose on the property owned by the borrowing entity, which could reduce or possibly eliminate the value of the collateral pledged in respect of the mezzanine loan.

Further, the value of the assets securing our loans have and may continue to deteriorate over time due to factors beyond our control, including acts or omissions by owners or managers of properties that are financed, changes in business, economic or market conditions, or the possibility that a sale or refinancing of, or a foreclosure on, those assets would not generate sufficient funds to pay amounts that are owed to us. In addition, there are significant costs and other delays associated with the process of foreclosing on collateral securing a loan.

Our results of operations and financial condition could be adversely affected if assumptions underlying our credit underwriting models prove to be incorrect.

Our credit underwriting process in each country and market in which we operate involves making determinations as to the creditworthiness of a borrower and the anticipated performance and value of the property being financed. When making credit determinations, we are required to make assessments concerning the quality, viability and future occupancy and rent levels of the property being financed, the operating efficiency of the borrower or manager of the property, the borrower's business plan, the proposed financing structure, expected business, economic and market conditions and other matters over which we and the borrower may not have control. These assessments are often made in part based on information provided by prospective borrowers, which is not always subject to independent verification. If the assessments that we make prove to be incorrect, whether as a result of an unforeseen development or an inaccuracy or misrepresentation in the information that we are provided, our extension of credit could entail more risk than predicted and we could incur unexpected losses. In addition, if we originate a loan that is subject to a material misrepresentation by a borrower or a person acting on the borrower's behalf, we may not be able to sell the loan or, if the loan has been resold prior to detection of the misrepresentation, we may be required to repurchase the loan from the buyer. Although it may be possible to proceed against the borrower or the person acting on its behalf, it may be difficult or impossible to recover any monetary losses that we suffer as a result of the misrepresentation.

If the estimates or assumptions we use to value our assets or determine our allowance for loan losses prove to be incorrect, we may be required to write down assets or increase our allowance for loan losses.

In connection with the preparation of our financial statements and those of the funds we manage, we are required to use estimates and make various assumptions in determining the fair values of mortgage loans, investment securities and mortgage servicing rights that we carry on our balance sheet or manage, as applicable, and in determining our allowance for loan losses. These estimates and assumptions are based on a number of factors and considerations, which may include, depending on the particular asset being valued, our experience and expectations concerning discount rates, interest rates, credit spreads, market pricing for sales of similar assets, prepayment rates, servicing fees, rates of delinquencies and defaults on loans and loss recovery rates. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates—Allowance for Loan Losses" in Item 7 of this Annual Report on Form 10-K. A material difference between our estimates and assumptions and our actual experience may require us to write down the value of assets or increase our allowance for loan losses, which could adversely affect our results of operations or financial condition.

The loss of or changes in our relationships with GSEs and federal agencies would have an adverse effect on our business.

Our status as an approved seller/servicer for Fannie Mae and Freddie Mac and our status as an FHA-approved mortgagee and issuer of Ginnie Mae MBS afford us a number of advantages. Our failure to comply with the applicable GSE or agency standards (financial and otherwise) may result in our termination as approved seller/servicer, mortgagee or issuer. If Fannie Mae were to terminate us for cause, including as a result of a material adverse change in our Company, it may terminate our selling and servicing rights without any fee and would not be obligated to pay us the proceeds of any sale of such servicing rights. Additionally, Fannie Mae could require that our DUS™ loss sharing obligations remain with us even though we would no longer be receiving any servicing fees. The loss of any such status could have a material adverse impact on our results of operations, could result in a loss of similar approvals from other GSEs or federal agencies and could have other adverse consequences to our business.

In addition, if Fannie Mae, Freddie Mac or HUD were to invite a significant number of our competitors to participate in their programs, our competitive position and results of operations could suffer.

As noted above, each of the GSEs has financial reporting requirements. Although the GSEs require us to provide audited financial statements generally within 90 days after the end of each fiscal year, each has agreed to provide us a one-time 30-day extension of the filing deadlines for our 2008 audited financial statements to April 30, 2009.

Each GSE and government agency retains broad discretion to terminate Capmark Finance as a seller/servicer without cause upon notice.

Changes in existing government-sponsored and federal mortgage programs could negatively affect our business.

Our ability to generate income through mortgage sales to institutional investors depends in part on programs sponsored by Fannie Mae, Freddie Mac and the FHA, which facilitate the issuance of MBS in the secondary market. These programs have been reduced in recent periods due to current economic conditions. Any discontinuation of, or significant reduction in, the operation of those programs could have a material adverse effect on our commercial real estate lending and mortgage banking and servicing businesses and our results of operations. Also, any significant adverse change in the level of activity in the secondary market or the underwriting criteria of these entities could negatively impact our results of operations and cash flow.

We are required to apply complex accounting standards in the ordinary course of our business. Changes in those standards, or improper application of those standards, may adversely affect our reported results of operations and financial condition.

We prepare our consolidated financial statements in accordance with generally accepted accounting principles ("GAAP"), which is a body of accounting principles that has been developed over time by members of the accounting profession and their professional bodies, including the American Institute of Certified Public Accountants, or the "AICPA," and the Financial Accounting Standards Board, or the "FASB," with the oversight and involvement of United States regulatory authorities, including the SEC. Many of the accounting standards applicable to our business are highly complex and are subject to varying interpretations as well as to changes over time by applicable regulatory authorities.

In the ordinary course of our business, we must make accounting judgments and estimates and must interpret the application of complex accounting rules to changing events and circumstances. If our accounting judgments or interpretations prove incorrect, corrections of our financial statements could have a material adverse effect on our financial condition or results of operations. We have previously restated our consolidated financial statements for the 284 days ended December 31, 2006 and the three

years ended December 31, 2005 to correct the improper application of technical accounting rules. The incorrect interpretation or application of technical accounting rules may lead to future restatements.

We also may be required to adopt new or revised accounting standards or comply with revised interpretations that are issued from time to time by recognized authoritative bodies, including the FASB and the SEC. Those changes could adversely affect our reported results of operations or financial condition.

The requirements associated with being a reporting company require significant company resources and management attention.

We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition within specified time periods and maintain effective disclosure controls and procedures and internal control over financial reporting within specified deadlines. Section 404 of the Sarbanes-Oxley Act requires that our management evaluate, and our independent registered public accountant report on, our internal control over financial reporting on an annual basis. We expect that we will be required to complete our initial internal controls assessment by the time of the filing of our Form 10-K for our fiscal year ending December 31, 2009. As a result, we incur significant legal, accounting and other expenses that we did not incur prior to the time we became required to file reports under the Exchange Act. We have made, and will continue to make, changes to our corporate governance standards, disclosure controls, internal controls over financial reporting and financial reporting and accounting systems designed to meet our reporting obligations on a timely basis, including the timely filing of Exchange Act reports. However, if the measures we take are not sufficient to satisfy our obligations, we may incur further costs and experience continued diversion of management attention, adverse reputational effects and possible regulatory sanctions or civil litigation.

Risks associated with yield guarantees for some of our LIHTC funds expose us to potential losses.

We sponsor low-income housing tax credit ("LIHTC") funds in which investors acquire limited partner interests in an upper-tier investment partnership, which in turn invests as a limited partner in one or more lower-tier partnerships that own and operate multifamily properties intended to qualify for LIHTCs. Our LIHTC funds enable investors to benefit from tax credits and tax losses from the lower-tier partnerships in which the funds invest. In connection with many of the LIHTC funds that we sponsor, we provide or obtain from a third-party a yield guarantee intended to preserve an expected yield for the fund investors. For those funds, which we refer to as "guaranteed LIHTC funds," if the yield for investors falls below the guaranteed level, we or the third party would be required to make a payment equal to the difference between the actual yield and the guaranteed yield. The yield on a fund investment could fall below the guaranteed level for a number of reasons, including if anticipated tax benefits are not achieved or tax benefits previously realized by investors become subject to recapture. The loss of tax benefits could result under applicable tax laws if, among other things, the property is not occupied by a minimum percentage of residents whose income falls below specified levels, the level of rent charged to certain residents exceeds certain limits or the fund's investment in the property is terminated through a sale or foreclosure of the property. We have agreed to reimburse most of our third-party yield guarantors (including GMAC with respect to guarantees that it issued prior to the Sponsor Transactions) for any amounts that they are required to pay under these guarantees. Our LIHTC operations have experienced losses in certain periods, including as a result of poor operating performance of certain lower-tier partnerships owned by guaranteed LIHTC funds, the loss or recapture of tax credits with respect to certain properties and other factors. In connection with the application of push down accounting in connection with the Sponsor Transactions, we increased the amount of liabilities on our balance sheet in respect of our LIHTC fund guarantees. If our payment obligations under the yield guarantees related to the guaranteed LIHTC funds that we have sponsored

exceed the amounts that we have recorded in our financial statements for these liabilities, our results of operations would be adversely affected.

Our sponsorship of LIHTC funds exposes us to various risks associated with equity investments in multifamily properties.

Investments in lower-tier partnerships are subject to numerous risks related to equity investments in multifamily properties, including delays in construction, increases in construction costs, inability to achieve or maintain high occupancy rates, increased property level expenses, property mismanagement and property damage from floods, fires or other causes, among others. These partnerships may not generate sufficient cash to pay operating expenses or debt service costs, which may result in the sale or foreclosure of the underlying property and the loss of tax benefits to investors. In addition, properties that are under construction may be unable to obtain permanent financing sufficient to repay the construction financing. If the interests in these partnerships are held by guaranteed LIHTC funds, we may be required to either advance funds to lower-tier partnerships to cover funding or operating shortfalls to ensure that investors in the guaranteed LIHTC funds do not lose their expected tax benefits or make payments to the investors to the extent that any loss of tax benefits causes the investors to receive less than the guaranteed yield. Also, even if we are not required to do so, we may advance funds to allow lower-tier partnerships to pay their operating expenses and debt service in order to preserve the expected tax benefits to investors. We have made and expect to continue to make advances to certain lower-tier partnerships to cover operating deficits or funding shortfalls in cases where we are required to do so to preserve tax benefits for investors or for other business reasons. We might not be able to recover any advances made to lower-tier partnerships and the failure to recover such advances may adversely affect our results of operations. In addition, the upper-tier LIHTC funds that we sponsor are dependent upon the cash flows of the lower-tier partnerships in which they invest to generate the cash flow necessary to pay fees for services, such as the management services that we render to them. The failure of any lower-tier partnerships to generate positive cash flow may adversely affect our ability to collect the fees owed to us.

We have exposure to risks of loss in the event that we are unable to recover advances or guarantee payments relating to certain lower-tier partnerships.

In some cases we have provided construction completion or operating deficit guarantees relating to our investments in or development of certain properties. We may be required to make guarantee payments under these agreements and may not be able to fully recover amounts advanced. We incur costs related to carrying interests in lower-tier partnerships. To the extent that we incur similar costs in the future, our results of operations may be adversely affected.

Our sponsorship of LIHTC funds involves additional risks that could adversely affect our business and results of operations.

In connection with our sponsorship of LIHTC funds, we act as a general partner of the upper-tier partnerships in which investors purchase interests. As general partner, we have various duties, including management of the funds' interests in lower-tier partnerships, financial reporting and tax reporting. The failure to perform any of our obligations could subject us to claims by investors for breach of contract or breach of duty.

We are dependent upon the proper operation of our systems and adequacy of our internal processes, and any failure in the operation of those systems or the adequacy of those processes could negatively affect our ability to operate our businesses.

Our businesses depend on our ability to process and administer transactions across numerous and diverse markets in many currencies, and the transactions we process and administer have become increasingly complex. Like all large corporations, we are exposed to many types of operational risks,

including the risk of fraud or unauthorized transactions by employees or outsiders, or operational errors, including clerical or record keeping errors or those resulting from faulty computer or other automated systems. If any of our financial, accounting or other systems do not operate properly or are disabled, or if there are other shortcomings or failures in our internal processes, people or systems, we could suffer impairment to our liquidity, financial loss, a disruption of our businesses, liability to customers, regulatory intervention or reputational damage. Our systems might fail to operate properly or become disabled as a result of events that might be beyond our control, including a disruption of electrical or communications services, computer viruses, natural disasters or other calamities such as terrorist attacks. The inability of our systems to accommodate an increasing volume of transactions could also constrain our ability to expand our businesses. In addition, our inability to implement and operate our systems on an efficient basis at costs comparable to our competition may result in a higher cost structure, which would have an adverse impact on our financial condition and results of operations.

We face competition that could harm our market share and results of operations.

Each of the business lines in which we compete is highly competitive on a national, regional, local, and in some cases, international level. Our primary competitors consist of mortgage companies, commercial banks, investment banks, insurance companies, other financial services firms, REITs, investment advisors and sponsors of investment funds and mortgage servicing companies, some of which are larger than us and have greater access to capital at a lower cost than we do.

We compete on the basis of pricing, terms, structure and service and could lose market share to the extent we are unwilling or unable to match our competitors' pricing, terms, structure and service.

Our business may be adversely affected by the regulated environment in which we operate and by governmental policies.

We are subject to regulation and supervision in a number of jurisdictions. The level of regulation and supervision to which we are subject varies from jurisdiction to jurisdiction and is based on the type of business activities involved. For example, two of our subsidiaries are industrial banks chartered by the State of Utah. Each of these banks is subject to regulation and periodic examination by the Utah Department of Financial Institutions and the FDIC and must comply with applicable capital adequacy requirements, limitations on transactions with affiliates, provisions of the Bank Secrecy Act, the USA PATRIOT Act and regulations of the Federal Reserve. Our Irish bank is also required to comply with various laws, rules and regulations in Ireland, including capital adequacy requirements, administrative notices implementing European Union Directives relating to business activities carried out by credit institutions and supplementary requirements and standards that are from time to time established by financial regulators. In connection with the Sponsor Transactions, we entered into a capital maintenance agreement with the FDIC that requires us to maintain the "well capitalized" status of our U.S. banks and to maintain the banks' Tier 1 leverage ratio above a prescribed minimum, and we delivered a letter of comfort to our Irish banking regulator in support of our Irish bank.

In addition, another of our subsidiaries is registered with the SEC as a broker-dealer under the Exchange Act and with state securities commissions in the United States under state securities laws. This subsidiary is also a member of FINRA and, accordingly, is subject to the rules, regulations and supervision of that regulatory body. Another subsidiary is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940 and is subject to federal and state laws and regulations. We have also obtained an investment management registration for one of our Japanese subsidiaries and are subject to the FIEL, and other applicable regulations. Other subsidiaries through which we conduct North American commercial real estate lending and mortgage banking activities hold various U.S. state and a Canadian provincial license relating to commercial real estate financing activities and are subject to various state laws and regulations.

In addition, the regulatory and legal requirements that apply to our activities are subject to change from time to time and may become more restrictive or costly, making our compliance with applicable requirements more difficult or expensive or otherwise restricting our ability to conduct our businesses in the manner that they are now conducted. The regulation and supervision of our Company and subsidiaries is primarily intended to benefit and protect our customers, and not our investors, and could limit our discretion in operating or increase the expense of running our businesses. Noncompliance with applicable statutes or regulations could result in the suspension or revocation of licenses or registrations that we have been granted, as well as the imposition of civil fines and criminal penalties. As a result of the regulated nature of our businesses, we are also subject to risk associated with (1) possible adverse results of regulatory and other governmental examinations or inquiries; (2) an increased possibility of litigation arising from regulatory and other governmental developments; (3) regulators' future use of supervisory and enforcement tools; and (4) legislative and regulatory reforms, including changes to tax laws or their interpretation. The impact of those developments could affect our ability to operate our businesses or negatively impact our financial condition, results of operations or reputation.

In recent years, the United States Congress has considered legislation which if passed would subject companies, such as us, that own industrial banks, referred to as "industrial bank holding companies" to regulation by the FDIC. It is reasonable to expect that Congress will in the future consider legislation that may affect the regulatory scheme applicable to industrial bank holding companies, either independently or as part of new laws applicable to financial institutions in general. The impact of any such legislation on the Company cannot be predicted at this time but could have a material impact on the manner in which the Company conducts its business or on its ownership structure. In addition, the Utah Department of Financial Institutions has notified Capmark Bank US that it has implemented a holding company supervision program intended to assess the degree to which the holding company serves as a source of financial and managerial strength to its Utah banks. The Utah Department of Financial Institutions indicated that it intends to conduct periodic on-site source of strength assessments and will evaluate financial strength (including capital, earnings and liquidity), the risks of the holding company organizational structure and risk management practices. The new supervisory program is being implemented under existing statutory authority and will supplement the existing examination activities of the Utah Department of Financial Institutions and the FDIC.

Our business could be adversely affected by changes in governmental fiscal and monetary policies.

Our business and earnings are significantly affected by the fiscal and monetary policies of the United States government and its agencies and similar governmental authorities and agencies in markets outside the United States in which we or our customers operate. We are particularly affected by the policies of the Federal Reserve, which regulates the supply of money and credit in the United States. The Federal Reserve's policies influence the yield on our interest-earning assets and the cost of our interest-bearing liabilities. Changes in those policies are beyond our control, are difficult to predict and could adversely affect our business, results of operations and financial condition.

If we are required to register under the Investment Company Act, our ability to conduct our business could be materially adversely affected.

The Investment Company Act of 1940, or the "Investment Company Act," contains substantive legal requirements that regulate the manner in which "investment companies" are permitted to conduct their business activities. We have conducted and intend to continue to conduct our business in a manner that does not result in our Company or any of our subsidiaries being characterized as an investment company. There are a number of possible exceptions from registration under the Investment Company Act that we believe apply to us and our subsidiaries and which we believe make it possible for us not to be subject to regulation as an investment company. For example, bank subsidiaries are exempt from the definition of an investment company, and the Investment Company Act exempts

entities that are primarily engaged in the business of "purchasing or otherwise acquiring mortgages and other liens on and interests in real estate."

Under current interpretations, an entity can meet that exception by maintaining at least 55% of its assets directly in mortgages and other liens on and interests in real estate, which we refer to as "qualifying interests," and an additional 25% of its assets in real estate-related assets. We believe that our subsidiaries can rely on the foregoing exceptions or others. The requirement that some of our subsidiaries maintain 55% of their assets in qualifying interests or satisfy another exception may inhibit our ability to acquire certain kinds of assets or to conduct certain activities in the future, which could negatively impact our business.

We have businesses that generate significant income from tax-favored investments, and changes in law or tax rates can reduce the income of those businesses by decreasing the attractiveness of those products.

Our tax-favored investment products are generally attractive because of the additional returns that they generate for investors compared to taxable investments. Changes in applicable tax laws or the application or interpretation of applicable tax laws could reduce or eliminate the benefits of these investment products. In addition, reductions in overall tax rates can reduce the tax benefits associated with our tax-favored investment products. A reduction in the tax benefits associated with these products could limit the market for these products, thereby reducing the amount of income that we may generate from future sales of these products.

Our sponsorship of NMTC funds is subject to unique risks that could impact our business and results of operations.

We sponsor new markets tax credit funds, which we refer to as "NMTC funds," that make investments in qualifying community development entities, or "CDEs," that receive new markets tax credit allocations as part of a federal program. In order for the fund investors to receive the benefit of these tax credits, the CDE must comply with program rules. Among other things, these rules impose periodic reporting requirements for the CDE and stipulate that substantially all of the CDE's capital be continuously deployed (subject to applicable grace periods) in qualifying investments throughout a seven-year compliance period (for purposes of compliance, losses on the CDE's investments are considered permanently deployed). In addition, we have made loans to NMTC funds that have made investments in CDEs. As a result of the seven-year investment requirement, our loans may be required to remain outstanding or proceeds from CDE investments may be required to be redeployed in qualifying investments rather than repaid to us in cash. A failure to satisfy these requirements may result in a loss of the tax credits and a recapture of any tax benefits that have been previously realized by an investor. As a sponsor of NMTC funds, we are responsible for ensuring that our funds comply with these requirements. A failure by us to satisfy these requirements could impair our ability to sponsor NMTC funds in the future and could require us to indemnify our fund investors for losses that they suffer due to our non-compliance, either of which could have an adverse effect on our business and results of operations.

Liabilities under environmental laws may expose us to losses or limit our ability to foreclose on properties securing loans.

Under various United States federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, under or in its property. Those laws typically impose cleanup responsibility and liability without regard to whether the owner or control party knew of or was responsible for the release or presence of hazardous or toxic substances. The costs of investigation, remediation or removal of those substances may be substantial. The owner or control party of a site also may be subject to common law claims by third parties based on damages

and costs resulting from environmental contamination emanating from a site. Certain environmental laws also impose liability in connection with the handling of or exposure to asbestos-containing materials, pursuant to which third parties may seek recovery from owners of real properties for personal injuries associated with asbestos-containing materials. Absent succeeding to ownership or control of real property, a secured lender is not likely to be subject to any of these forms of environmental liability. However, real estate investments in which we hold an ownership interest, either by exercise of our remedies as a secured lender or by an equity investment, can subject us to environmental liability. Potential environmental liabilities may also prevent us from foreclosing on properties that secure our loans.

We are controlled by our Sponsors whose interests may differ from the interests of our other stockholders or our creditors.

Our Sponsors and one other investor hold approximately 75.4% of our outstanding common stock and, as a result of their holdings and the terms of a stockholders agreement they have entered into with our Company and GMAC, are able to control the election of a majority of our directors and significantly influence our business and affairs. The interests of our Sponsors and their affiliates could conflict with the interests of our other stockholders and our creditors. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of our Sponsors as equity holders might conflict with the interests of the holders of our notes. Our Sponsors and their affiliates also may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investments, even though those transactions might involve risks to our creditors. In addition, our Sponsors or their affiliates own, operate or have interests in businesses that directly compete with our Company, such as KKR Financial Holdings, Goldman Sachs Capital Partners, Five Mile Capital Partners and the Dune Funds and may in the future own, operate or have interests in competing businesses.

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify these statements by our use of forward-looking words such as "may," "will," "should," "anticipate," "estimate," "expect," "plan," "believe," "predict," "potential," "project," "intend," "could" or similar expressions. In particular, statements regarding our plans, strategies, prospects and expectations regarding our business are forward-looking statements. You should be aware that these statements and any other forward-looking statements in this document only reflect our beliefs, assumptions and expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Many of these risks, uncertainties and assumptions are beyond our control and may cause actual results and performance to differ materially from our expectations.

Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Important factors that could cause our actual results to be materially different from our expectations include the risks and uncertainties set forth under "Risk Factors" and elsewhere in this Annual Report on Form 10-K.

Accordingly, you should not place undue reliance on the forward-looking statements contained in this Annual Report on Form 10-K. These forward-looking statements are made only as of the date of this Annual Report on Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Our principal headquarters are located in Horsham, Pennsylvania. As of December 31, 2008, we maintained 51 offices.

Below we have described our executive office and those offices with more than 20,000 square feet of rentable space being used by our employees as of December 31, 2008.

Location	Principal Activities		Lease Expiration

Horsham, Pennsylvania (Four Buildings)	Executive Office North American Lending and Mortgage Banking; North American Investments and Funds Management; North American Servicing; Corporate and other	159,600	Owned
Atlanta, Georgia	North American Lending and Mortgage Banking; North American Investments and Funds Management; North American Servicing	31,800	December 31, 2014
Denver, Colorado	North American Lending and Mortgage Banking; North American Affordable Housing; Corporate and other	28,100	June 30, 2012
Chicago, Illinois	North American Lending and Mortgage Banking; Corporate and other	25,800	December 31, 2017
Tokyo, Japan	Asian Operations; Corporate and other	39,100	February 28, 2010
New York, New York	North American Lending and Mortgage Banking; North American Investments and Funds Management	37,400	July 31, 2011
Mullingar, Ireland	European Operations	23,800	February 4, 2018

In addition to the properties described above, as of December 31, 2008, we leased space for our branch offices throughout the United States and for our operations in Germany, Japan, Taiwan, China, India, the Philippines, Ireland and the United Kingdom. We believe that our facilities are adequate for us to conduct our present business activities.

Except for our offices in Horsham, Pennsylvania, all of our office space is leased. The most significant terms of the lease arrangements for our office space are the length of the lease and the amount of the rent. Our leases have terms varying in duration and rent as a result of differences in prevailing market conditions in different geographic locations. We do not believe that any single office lease is material to our business, results of operations or financial condition. In addition, we believe there is adequate alternative office space available at acceptable rental rates to meet our needs, although adverse movements in rental rates in some markets may negatively affect our results of operations when we enter into new leases.

The Investigation Bureau of the Ministry of Justice of Taiwan presented one of our Taiwan-based subsidiaries with a search warrant in June 2008, authorizing a search for documents relating to a 2005 transaction involving a purchase of non-performing loan and real estate assets from Bowa Bank, a Taiwanese bank. Bowa Bank was taken over by the Central Deposit Insurance Corporation in August 2007 as part of an insolvency proceeding. The Investigation Bureau is reviewing a number of transactions entered into by Bowa Bank prior to its insolvency. According to the search warrant, this case relates to an investigation of potential violations of the Taiwanese Banking Law and Securities and Exchange Law. An officer of this Taiwanese subsidiary was also questioned as a witness in connection

with the investigation. No criminal or civil claims have been brought against us or any of our employees in connection with these matters. We are cooperating with the investigation.

On April 3, 2009, the one non-extending bridge loan lender filed a complaint against us in connection with the non-repayment of the $48 million principal amount of the bridge loan held by such lender. The complaint alleges breach of contract, breach of the covenant of good faith and fair dealing and conversion by us in connection with the non-repayment. The lender is seeking repayment of principal and interest under the bridge loan agreement, damages and attorneys' fees and costs. We were served with notice of the complaint on April 8, 2009.

We have received correspondence from certain of the holders of our senior notes stating that they believe that we have defaulted under the terms of the indentures governing the senior notes by failing to timely file our Form 10-K for the year ended December 31, 2008. We have also received correspondence from certain of the holders of our senior notes and certain of the lenders under our senior credit facility that are not lenders under our bridge loan agreement requesting that we provide them with the information that we have provided to the bridge lenders and urging us to undertake a comprehensive debt restructuring.

We may be subject to potential liability under various legal actions that are pending or that may be asserted against us in the ordinary course of business or in connection with our restructuring efforts. While the outcomes of the various pending legal actions are not certain, based on present assessments, management does not believe that they will have a material adverse effect on our business.

On November 25, 2008, pursuant to Section 78.320 of the Nevada Revised Statutes, we received the written consent of our stockholders to act by written consent in lieu of a meeting to elect Bradley J. Gross to serve as a member of our board of directors. We received the consent of our stockholders holding 412,803,348 shares with respect to the election of Mr. Gross.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our outstanding common stock is privately held and there is no established public trading market for our common stock. There were approximately 260 stockholders of record of our common stock as of March 31, 2009.

We did not pay a dividend on our common stock during the years ended December 31, 2008 and December 31, 2007. As a result of two consecutive fiscal quarters of negative adjusted earnings before taxes, we determined that a mandatory deferral of interest payments event has occurred with respect to our junior subordinated debentures. During the existence of a mandatory deferral event, we may not pay dividends on our common stock. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources—Unsecured Funding—Junior Subordinate Indentures" in Item 7 of this Annual Report on Form 10-K.

During the fourth quarter of 2008, we sold 737 shares of our common stock, par value $0.001 per share, and issued 33,608 hypothetical shares, or 34,345 equity securities in the aggregate, in the transactions described below. The hypothetical shares are held in separate accounts and are valued to be equal to the fair value of a share of our common stock. Hypothetical shares are paid out at fair market value upon termination or a change of control and may be paid in cash or current shares at our election. The shares of common stock were sold and the hypothetical shares were issued in the following transactions, which were exempt from the registration requirements of the Securities Act of

1933, as amended, and, in particular pursuant to Rule 4(2). No underwriters were employed in any of these transactions.

The selected historical financial data in the table below for the periods subsequent to March 22, 2006 have been derived from our audited successor consolidated financial statements. In connection with the Sponsor Transactions, we were required to revalue our assets and liabilities as of March 23, 2006 using "push down" accounting as described under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Basis of Presentation—Presentation of Our Consolidated Results." The financial statements for the periods subsequent to March 22, 2006 have been prepared after applying the push down method of accounting. The selected historical financial data in the table below for the periods prior to March 23, 2006 have been derived from our audited predecessor consolidated financial statements, which were prepared using our historical basis of accounting. The following data should be read in conjunction with the discussion and analysis under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of this Annual Report on Form 10-K.

			Successor							Predecessor

			Year ended December 31,					Period from March 23, 2006 to December 31, 2006		Period from January 1, 2006 to March 22, 2006			Year ended December 31,
			2008			2007		Period from March 23, 2006 to December 31, 2006		Period from January 1, 2006 to March 22, 2006			2005		2004
			(in thousands, except per share data)
Statement of Operations Data:
Net Interest Income
Interest income			$	959,585		$	1,251,192	$	901,753	$	253,691		$	1,030,493	$	816,298
Interest expense				761,018			914,460		659,514		172,176			596,637		360,669

Net interest income				198,567			336,732		242,239		81,515			433,856		455,629
Provision for loan losses				179,665			32,666		73,585		1,031			42,826		5,645

Net interest income after provision for loan losses				18,902			304,066		168,654		80,484			391,030		449,984

Noninterest Income
Noninterest income				(690,599	)		908,079		755,520		136,666			1,079,410		774,239

Net revenue				(671,697	)		1,212,145		924,174		217,150			1,470,440		1,224,223

Noninterest expense				783,252			889,374		770,181		220,939			1,120,433		953,225

(Loss) income before minority interest and income tax provision (benefit)				(1,454,949	)		322,771		153,993		(3,789	)		350,007		270,998
Minority interest income				110,480			124,331		53,308		12,264			57,682		44,654

(Loss) income before income tax provision (benefit)				(1,344,469	)		447,102		207,301		8,475			407,689		315,652
Income tax provision (benefit)				8,300			166,778		63,157		(3,972	)		112,898		84,888

Net (loss) income			$	(1,352,769	)	$	280,324	$	144,144	$	12,447		$	294,791	$	230,764

	Basic net (loss) income per share:(1)
		Net (loss) income per share	$	(3.13	)	$	0.65	$	0.33	$	0.03		$	0.71	$	0.56
		Weighted average basic shares outstanding		431,672			433,071		431,899		412,803			412,803		412,803
	Diluted net (loss) income per share(2)
		Net (loss) income per share	$	(3.13	)	$	0.65	$	0.33	$	0.03		$	0.71	$	0.56
		Weighted average diluted shares outstanding		431,672			434,315		432,037		412,803			412,803		412,803

	Successor						Predecessor

	December 31,
	2008		2007		2006		2005		2004
	(in thousands)
Balance Sheet Data:
Cash, cash equivalents and restricted cash(3)	$	874,390	$	1,436,752	$	575,265	$	494,113	$	609,202
Investment securities(4)		2,301,351		1,135,374		2,040,291		2,937,251		2,780,677
Loans, net(5)		12,178,663		14,675,483		11,645,474		12,496,023		9,669,234
Total assets		20,638,175		23,264,396		20,956,480		20,450,903		16,619,558
Short-term borrowings		3,310,758		3,832,637		2,708,299		9,037,171		8,885,542
Long-term borrowings		8,282,835		8,307,686		8,966,905		2,571,176		2,383,477
Deposit liabilities		5,690,930		5,552,607		2,902,006		4,179,242		1,656,711
Mezzanine equity(6)		72,851		102,418		102,274		—		—
Stockholders' equity		1,146,034		2,506,633		2,229,225		1,996,622		1,814,723

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Our "Management's Discussion and Analysis of Financial Condition and Results of Operations" is organized as follows:

We are a commercial real estate finance company that operates in three core business lines: lending and mortgage banking; investments and funds management; and servicing. Through our operating subsidiaries, we operate our businesses in North America, Asia and Europe. We provide our borrowers, investors and other customers with commercial real estate financial products and services, which we tailor to our customers' particular needs. As of December 31, 2008, we had more than 1,900 employees located in 51 offices worldwide.

We originated $10.5 billion and $29.2 billion in aggregate principal amount of financing during the years ended December 31, 2008 and 2007, respectively. Our global primary, master and special servicing portfolios included approximately 49,000 loans with an aggregate outstanding principal balance of $362.1 billion as of December 31, 2008 compared to approximately 55,000 loans with an aggregate outstanding principal balance of $371.7 billion as of December 31, 2007. Real estate related assets under management were approximately $9.0 billion as of December 31, 2008 compared to $10.3 billion as of December 31, 2007. As of December 31, 2008, our total assets were $20.6 billion and our stockholders' equity was $1.1 billion.

For management reporting purposes, we conduct our lending and mortgage banking, investments and funds management, and servicing businesses through six business segments. These business segments, which are organized based on geography and the type of business conducted, are as follows:

During 2008, we focused our efforts on allocating capital effectively and preserving our liquidity position in each of the geographic regions where we operate. We significantly reduced our Asian proprietary lending and investing activities beginning in the second quarter of 2008. We also curtailed our European lending activities starting in the fourth quarter of 2007 and sold a large portion of our European loan portfolio in April 2008. Our efforts in Asia and Europe are currently focused on managing our existing loan, investment and fee-for-services businesses. We have also reduced staffing levels to correspond with the decreased level of activities in both segments. In light of current market conditions, we also substantially reduced proprietary loan originations and investment activities in North America, while continuing to originate loans for third parties and GSEs.

We accounted for the Sponsor Transactions as a purchase by the Sponsors and Management Stockholders in accordance with Statement of Financial Accounting Standards ("SFAS") No. 141 and SEC Staff Accounting Bulletin ("SAB") 54. Push down accounting requires the new cost basis of the Sponsors and Management Stockholders in our assets and liabilities be "pushed down" into our consolidated financial statements. Under push down accounting, we revalued our assets and liabilities as of March 23, 2006 and adjusted amounts in our consolidated balance sheet as of that date to reflect the purchase price that the Sponsors and Management Stockholders paid for their equity in our Company. In connection with this revaluation, we allocated the aggregate purchase price paid by the Sponsors and Management Stockholders for their initial 79% interest in our Company to our assets and liabilities based on the fair value of our assets and liabilities as of March 23, 2006. Due to the continuing nature of GMAC's approximately 21% indirect ownership interest in our Company, GMAC's interest in our assets and liabilities continued to be reflected on a historical basis in our consolidated balance sheet as of March 23, 2006. As a result of the application of push down accounting, the assets and liabilities were reflected based on a "blended value," 79% of which reflected the fair value of those assets and liabilities on March 23, 2006 and 21% of which reflected GMAC's historical basis in those assets and liabilities. As explained in more detail below, changes in the carrying value of our assets and liabilities on our consolidated balance sheet as of March 23, 2006 have had and will continue to have impacts on certain line items in our consolidated statements of income. For example, the increases in the carrying value of assets on our consolidated balance sheet as of March 23, 2006 that resulted from push down accounting have had and are expected to continue to have a negative impact on our net income as compared to what our net income would have been had push down accounting not been applied. Correspondingly, increases in the carrying value of liabilities on our consolidated balance sheet as of March 23, 2006 that resulted from push down accounting have had and are expected to continue to have a positive impact on our net income as compared to what our net income would have been had push down accounting not been applied.

Although our Company continued to exist as the same legal entity after the completion of the Sponsor Transactions, as a result of the application of push down accounting, we are required to present consolidated financial statements for "predecessor" and "successor" periods. Our predecessor periods relate to the accounting periods preceding the Sponsor Transactions in which we applied a historical basis of accounting. Our successor periods relate to the accounting periods following the Sponsor Transactions in which we have applied push down accounting. To enhance the comparability of our consolidated results, we have mathematically combined our predecessor consolidated results for the period from January 1, 2006 to March 22, 2006 and our successor consolidated results for the period from March 23, 2006 to December 31, 2006. Although this presentation does not comply with GAAP, we believe it provides the most meaningful comparison of our consolidated results for the three years ended December 31, 2008 because it allows us to compare our consolidated results over equivalent periods of time. Although we believe the foregoing presentation provides the most meaningful presentation for comparing our annual results, you should nonetheless bear in mind that the

consolidated financial statements for our predecessor and successor periods have been prepared using different bases of accounting and, accordingly, are not directly comparable to one another.

The significant effects of the application of push down accounting on our successor consolidated balance sheet as of March 23, 2006 include the impacts summarized below. Those impacts have been diminishing over time as the relative position of assets that were on our balance sheet at the time of the Sponsor Transactions decreases.

The following table presents the impact of the push down accounting adjustments described above on our consolidated balance sheet as of March 23, 2006 and on our consolidated statement of operations for the years ended December 31, 2008 and 2007 and the period from March 23, 2006 to December 31, 2006.

				Corresponding Impact on Consolidated Statement of Operations(1)

	Change in Consolidated Balance Sheet Carrying Value as of March 23, 2006
Balance Sheet Item:				For the Year Ended December 31, 2008			For the Year Ended December 31, 2007			For the period from March 23, 2006 to December 31, 2006
	(in thousands)
Assets:
Loans held for sale and loans held for investment	$	71,879		$	1,447		$	(14,323	)	$	(66,805	)
Real estate and equity investments		265,439			(18,215	)		(56,990	)		(147,203	)
Mortgage servicing rights		216,585			(31,217	)		(26,211	)		(22,131	)
Deferred tax assets		(90,611	)		N/A			N/A			N/A
Intangible assets		154,259			(9,926	)		(28,833	)		(6,894	)
Other assets, including cash received for mezzanine equity		24,978			(10,879	)		(1,515	)		8,970

Total assets	$	642,529		$	(68,790	)	$	(127,872	)	$	(234,063	)

Liabilities and Minority Interests:
Liability for LIHTC yield guarantees		401,668			38,230			58,948			147,302
Other liabilities(2)		72,310			7,640			11,619			5,634
Minority interest		38,445			2,530			2,344			33,970
Mezzanine Equity		73,877			—			—			—
Stockholders' Equity		56,229			—			—			—

Total liabilities and stockholders' equity	$	642,529		$	48,400		$	72,911		$	186,906

Summary Net Income Impact:
Impact on income before income tax provision				$	(20,390	)	$	(54,961	)	$	(47,157	)
Impact on income taxes					9,783			16,071			21,654

Impact on net income				$	(10,607	)	$	(38,890	)	$	(25,503	)

We present the results of operations for our six business segments in accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," or "SFAS No. 131." This standard is based on a management approach, which requires presentation of our segments based upon our organization and internal reporting of results of operations.

The segment information included in this section of our Annual Report on Form 10-K has been prepared using a reporting methodology that is different from the reporting methodology used in our consolidated financial statements and, as a result, is not directly comparable to our consolidated results. In particular:

The following tables summarize financial information for each of our six business segments as of the dates and for the periods indicated. The tables also present reconciling amounts that are included in "Corporate and other" to reconcile management's reporting of our segment financial information to amounts included in our consolidated financial statements (in thousands):

		Year ended December 31,

		2008			2007			2006
Net Revenue(1):
North American Lending and Mortgage Banking		$	(194,393	)	$	424,125		$	626,446
North American Investments and Funds Management			(193,769	)		217,960			251,381
North American Servicing			287,935			397,209			397,680
Asian Operations			(207,729	)		199,715			232,784
European Operations			(373,820	)		89,276			45,639
North American Affordable Housing			(32,145	)		48,385			(193,970	)

	Subtotal		(713,921	)		1,376,670			1,359,960
Corporate and other:
	Corporate functions and immaterial businesses		42,011			11,868			(8,514	)
	Consolidated affordable housing partnerships		18,306			135			(16,526	)
	Deferral of placement fees		(9,941	)		(142,817	)		(123,977	)
	Eliminations and other adjustments		(22,395	)		(17,584	)		7,704
	Push down accounting adjustments		14,243			(16,127	)		(77,323	)

Total Corporate and other			42,224			(164,525	)		(218,636	)

Consolidated amount		$	(671,697	)	$	1,212,145		$	1,141,324

(Loss) Income Before Income Taxes:
North American Lending and Mortgage Banking		$	(373,560	)	$	170,405		$	343,161
North American Investments and Funds Management			(186,237	)		149,552			143,642
North American Servicing			99,325			192,033			154,524
Asian Operations			(289,540	)		106,347			104,259
European Operations			(408,515	)		35,489			(23,184	)
North American Affordable Housing			(66,589	)		2,404			(272,116	)

	Subtotal		(1,225,116	)		656,230			450,286
Corporate and other:
	Corporate functions and immaterial businesses		(98,963	)		(154,167	)		(187,353	)
	Push down accounting adjustments		(20,390	)		(54,961	)		(47,157	)

Total Corporate and other			(119,353	)		(209,128	)		(234,510	)

Consolidated amount		$	(1,344,469	)	$	447,102		$	215,776

		December 31,

		2008		2007
Total Assets:
North American Lending and Mortgage Banking		$	11,597,285	$	12,159,800
North American Investments and Funds Management			772,285		1,050,576
North American Servicing			901,151		894,259
Asian Operations			2,886,256		2,789,044
European Operations			538,675		3,068,097
North American Affordable Housing			891,907		1,084,783

	Subtotal		17,587,559		21,046,559
Corporate and other:
	Corporate functions and immaterial businesses(1)		1,634,754		489,093
	Consolidated affordable housing partnerships		1,144,794		1,508,608
	Push down accounting adjustments		271,068		220,136

Total Corporate and other			3,050,616		2,217,837

Consolidated amount		$	20,638,175	$	23,264,396

As a commercial real estate finance company, our ability to generate income and cash flow is highly dependent on the volume of financing that we originate; our ability to securitize, sell, participate or otherwise finance our loans; the value of the loans on our balance sheet; and the spreads we generate on our interest-earning assets. In addition, our financial performance is driven by, among other things, our ability to increase the size of our servicing portfolio and the amount of real estate-related assets under our management. The success of our origination activities impacts our level of placement fees and net interest income and impacts the amount of loans that we have available for future sale and servicing opportunities, which in turn affects our levels of net gains or losses and fee-based income. Our ability to increase the size of our servicing portfolio, which is also driven by the level of our origination and distribution activities as well as the volume of mortgage servicing rights that we acquire, affects the level of servicing fees that we earn and income that we derive from escrow balances. Our financial results are also dependent on the amount of assets under our management as well as on changes in the values of our real estate-related assets, which impact the levels of fee-based income and net gains or losses that we recognize.

The amount of financing that we arrange, the number of servicing opportunities that are presented to us, the spreads we generate on our interest-earning assets and the gains or losses we realize on sales of our assets are subject to various factors. These factors include availability of funding sources, cost of capital, changes in the interest rate environment, CMBS spreads, commercial real estate prices, levels of supply and demand for commercial real estate and real estate-related investments, competition in our industry and the condition of local, national and international economies. These factors also affect our estimates of loan losses and other items affecting expected cash flows from our assets and our related valuation of those assets. As a consequence of these factors, activity of our business lines is cyclical.

Our financial results are highly dependent on the condition of the economies and financial markets in which we operate. Beginning in mid-2007 and continuing throughout 2008 and into 2009, global market volatility, disruptions in the credit and capital markets and weakening economic conditions created an extremely challenging business environment. Market difficulties contributed to the bankruptcy filing of Lehman Brothers Holdings Inc., the federal government conservatorship of Fannie Mae and Freddie Mac, JPMorgan Chase & Co.'s acquisition of The Bear Stearns Companies, Inc., JPMorgan Chase & Co.'s acquisition of Washington Mutual Bank, the federal government's significant investment in American International Group, Inc., Bank of America Corp.'s acquisition of Merrill Lynch & Co. Inc., and Wells Fargo & Co.'s acquisition of Wachovia Corp. The U.S. structured credit markets have remained severely limited with respect to new issuances, including the CMBS and CDO markets which have effectively ceased. Delinquency and default rates on commercial mortgage loans have increased. These rates may continue to increase as a result of adverse economic conditions, including lack of available credit, higher vacancy rates and declining rents. The European and Asian economies have experienced similar turmoil in their financial markets and broader economies.

These difficult market conditions have continued to negatively affect our three core businesses. The general lack of liquidity in the debt markets has made it increasingly difficult for us to access the capital we need to operate our business. As a result of our inability to access new capital, we have effectively ceased our proprietary lending and investment activities, which has and is expected to continue to negatively impact the growth of our loan and servicing portfolios. The scarcity of liquidity in the market has also made it difficult for commercial real estate borrowers seeking replacement financing. The unavailability of replacement financing decreases our transaction-related servicing fees and increases the average duration of our loan portfolio as a result of loan extensions, thereby decreasing our cash flow. Additionally, the unavailability of replacement financing and current market conditions has increased our number of non-performing assets. The growth of our servicing portfolio has and may continue to be slowed by the lack of new CMBS issuances, decreasing our source of counter-cyclical income. Additionally, if Fannie Mae, Freddie Mac or the FHA were to reduce or modify their lending programs, or were to suspend or alter their servicing relationship with us, we may be unable to continue to originate and sell loans to, or service loans for, these GSEs or under the programs sponsored by the FHA.

The unfavorable economic and financial market conditions have caused us to recognize significant downward changes in fair value on our loans held for sale and investment securities. We have also experienced increased loan loss provisions on our loans held for investment, and higher levels of non-performing loans and foreclosed real estate in our portfolio. In addition, our real estate and real estate equity investments, including those held directly and those held in funds, have declined in value. Our ability to earn incentive fees on current investment funds and raise new real estate investment funds has and is expected to continue to be constrained by the current real estate market conditions. Our expectation is that the commercial real estate markets in which we operate will continue to be stressed throughout the remainder of 2009 due to weaker economic conditions and reduced liquidity.

In an effort to stave off a financial crisis, the U.S. government and governments in the other markets where we operate are responding by providing unprecedented levels of liquidity and capital support to the financial system. Nevertheless, as a result of the current economic stress, as well as the need to preserve capital, most lending and financial institutions have dramatically restricted credit. This difficulty in accessing credit constrains our ability to refinance our indebtedness, originate loans and the ability of our borrowers to repay loans, among other things.

The combination of the foregoing factors has constrained our liquidity and caused us to incur significant losses. These factors have also negatively impacted our ability to execute our operating strategies as originally planned. In light of the obstacles presented in the current market environment,

our current focus is on allocating capital effectively, preserving our liquidity position, and seeking to reduce our expenses. As the disruptions to the markets persist, we will continue to manage our originations, reducing their overall volume and changing the composition among product types to emphasize products with better liquidity and lower funding costs, including GSEs, HUD and third party originations. We will also continue to focus on our recurring fee businesses, such as servicing and investments and funds management.

We plan to continue to negotiate with our lenders to complete a restructuring of our senior credit facility and bridge loan agreement although there can be no assurance that we will complete a restructuring of these credit facilities. In addition, we are performing a review of all of our businesses, including exploring strategic alternatives for such businesses and implementing significant expense reduction initiatives. We have engaged financial advisors to assist with our efforts to manage expenses and evaluate our strategic alternatives.

The following table summarizes our consolidated results of operations for the periods indicated (in thousands). To facilitate a discussion of our results of operations, the information set forth below for the year ended December 31, 2006 represents a mathematical combination of our predecessor consolidated results for the period from January 1, 2006 to March 22, 2006 and our successor consolidated results for the period from March 23, 2006 to December 31, 2006. However, our consolidated financial statements for our predecessor and successor periods have been prepared using different bases of accounting, with the successor period reflecting the application of push down accounting. Accordingly, the information set forth below with respect to the years ended December 31, 2008 and 2007 is not directly comparable to the year ended December 31, 2006.

		Year ended December 31,

		2008			2007		2006
Net interest income		$	198,567		$	336,732	$	323,754
Noninterest income			(690,599	)		908,079		892,186

	Total revenue		(492,032	)		1,244,811		1,215,940
Provision for loan losses			179,665			32,666		74,616

	Net revenue		(671,697	)		1,212,145		1,141,324
Noninterest expense			783,252			889,374		991,120

(Loss) income before minority interest and income taxes			(1,454,949	)		322,771		150,204
Minority interest income			110,480			124,331		65,572

(Loss) income before income taxes			(1,344,469	)		447,102		215,776
Income taxes			8,300			166,778		59,185

Net (loss) income		$	(1,352,769	)	$	280,324	$	156,591

We incurred a loss after income taxes of $1.4 billion for the year ended December 31, 2008 compared to income after income taxes of $280.3 million for the year ended December 31, 2007. The current year loss was primarily attributable to lower noninterest income due to net losses on loans, investments and real estate and lower fee and investment income, partially offset by a reduction in non-interest expense. Net losses on loans included in noninterest income totaled $1.0 billion (of which $390.7 million was realized), primarily resulting from downward changes in fair value on loans, compared to net losses on loans of $128.4 million (which is net of realized gains totaling $7.3 million)

for the year ended December 31, 2007. We also established a $389.7 million valuation allowance on our federal and foreign deferred tax assets as of December 31, 2008.

We had income after taxes of $280.3 million for the year ended December 31, 2007 compared to $156.6 million for the year ended December 31, 2006. The $123.7 million increase was primarily driven by an increase in fee and investment income combined with a reduction in our provision for loan losses and noninterest expense. Fee and investment income increased $120.7 million reflecting increased structuring fees and investment syndication income, asset management fees, and trust fees. The reduction in our provision for loan losses was due to a specific non-recurring loan loss provision in 2006 related to a loan to a joint venture that invested in non-performing loans in Germany. The reduction in noninterest expense resulted from our expense management initiatives.

Net interest income represents the difference between the amount of interest that we earn on our interest-earning assets and the amount of interest that we pay on our interest-bearing liabilities. Net interest income is driven by the principal amount of interest-earning assets and interest-earning liabilities that we hold on our consolidated balance sheet and the changes in the spread between the two. These drivers in turn depend on our origination volumes, the length of time that we hold interest-earning assets on our consolidated balance sheet, the yields that we earn on interest-earning assets and our funding costs, which in turn are affected by changes in prevailing interest rates, our credit ratings, demand for commercial real estate financing and general business, economic and market conditions.

The following table summarizes our net interest income for the periods indicated (in thousands):

Net interest income totaled $198.6 million for the year ended December 31, 2008 compared to $336.7 million for the year ended December 31, 2007. The $138.1 million decline was primarily due to a decrease in average loans and the size of our investment securities portfolios for the year ended December 31, 2008 compared to 2007, and an increase in impaired loans in 2008 for which interest income is not recognized. The decline in net interest income was partially offset by gains of $61.8 million on certain interest rate hedges, which are included in noninterest income.

Our net interest income totaled $336.7 million for the year ended December 31, 2007 compared to $323.7 million for the year ended December 31, 2006. The $13.0 million increase was primarily driven by an increase in interest-earning assets.

Interest income is primarily earned on the loans that we originate and hold for sale or investment, from the accretion of income on non-performing loans acquired at a discount to their face value and from the investment securities carried on our consolidated balance sheet. The investment securities

carried on our consolidated balance sheet consist of: CMBS, ABS and CDOs; tax-exempt securities; certain Japanese securities ("TMK securities"); MBS issued by Ginnie Mae, Fannie Mae and Freddie Mac; U.S. Treasury and other securities. In certain situations, we have acquired investment securities for trading purposes. In connection with the sale of a majority of our affordable housing debt platform in February 2007, we sold a significant portion of the related tax-exempt securities that we owned. Unrelated to the sale of a majority of our affordable housing debt platform, we also sold $746.1 million of tax-exempt securities related to our former tender option bond program and repaid the outstanding related financing of $731.6 million in March and April 2007.

We have both fixed and floating rate assets on our consolidated balance sheet. We hedge the interest rate risk associated with most of our fixed rate assets through the use of derivative instruments and other risk mitigation strategies. However, because the net gains and losses associated with these derivative instruments generally are not classified as interest income, we may experience volatility in our reported amounts of interest income and associated gains and losses on derivative instruments.

The following table summarizes our sources of interest income for the periods indicated (in thousands):

	Year ended December 31,

Interest Income	2008		2007		2006
Loans(1)	$	779,478	$	952,228	$	806,820
Investment securities		79,434		106,829		140,675
Acquired non-performing loans		23,954		59,002		69,483
Escrow balances		22,829		53,616		36,139
Assets collateralized in securitization trusts(2)		14,009		27,334		78,297
Other		39,881		52,183		24,030

Total	$	959,585	$	1,251,192	$	1,155,444

Interest expense consists primarily of amounts paid to third parties under our debt financing arrangements including our senior notes, interest that accrues on our deposit liabilities and interest that we are required to pay on a portion of the escrow balances that we maintain. Interest expense relating to our deposit liabilities has grown significantly in comparison to interest expense at the end of 2006 as a result of an increase in the amount of Brokered CDs issued by Capmark Bank US. The increase in the amount of Brokered CDs has also resulted in an increase in fees paid at issuance. Such fees are reported as a component of interest expense in our consolidated statement of operations. For Brokered CDs carried at fair value, such fees are expensed at issuance.

We have both fixed and floating rate borrowings and fixed rate deposit liabilities on our consolidated balance sheet. Because our interest-earning assets are predominantly floating rate, we generally convert our fixed rate borrowings and deposit liabilities to floating rate borrowings and deposit liabilities through the use of derivative instruments and other risk mitigation strategies. However, because the net gains and losses associated with these derivative instruments generally are

not classified as interest expense, we may experience greater variability in our reported amounts of interest expense and associated gains and losses on derivative instruments. Based on the currently low interest rate environment, we have elected not to convert certain of our fixed rate borrowings and deposit liabilities to floating rate borrowings and deposit liabilities through hedging arrangements.

The following table summarizes our sources of interest expense for the periods indicated (in thousands):

	Year ended December 31,

Interest Expense	2008			2007			2006
Long-term borrowings	$	389,528		$	492,031		$	426,259
Short-term borrowings		117,411			134,007			206,064
Deposit liabilities		248,913			265,784			136,365
Collateralized borrowings in securitization trusts(1)		14,287			34,607			71,298
Other(2)		(9,121	)		(11,969	)		(8,296	)

Total	$	761,018		$	914,460		$	831,690

Noninterest income includes net realized and unrealized gains and losses on loans, trading derivatives, investment securities, real estate investments and equity investments. Effective January 1, 2008, we elected to carry our loans held for sale at fair value in accordance with SFAS No. 159. Prior to January 1, 2008, we carried our loans held for sale at the lower of cost or fair value in accordance with SFAS No. 65, "Accounting for Certain Mortgage Banking Activities." If we write down the value of a loan that we hold for sale as a result of a decrease in the loan's fair value, we reduce noninterest income by an amount equal to the write-down in the carrying value of the loan. This change in fair value is reported as a component of net (losses) gains on loans in our consolidated statement of operations.

Historically we generated net gains in connection with our sales of loans through securitization and syndication activities. In recent periods, market conditions have adversely affected our ability to securitize, syndicate or otherwise sell loans and other assets and as a result, we have incurred realized and unrealized losses on our loans, investments and real estate. We generally expect to continue to incur additional net losses during 2009 as market conditions for commercial real estate are expected to remain depressed and we expect our level of net gains and losses to continue to fluctuate from year to year.

The following table presents information concerning our net (losses) gains for the periods indicated (in thousands):

Net losses totaled $1.2 billion for the year ended December 31, 2008 compared to net gains of $12.6 million for the year ended December 31, 2007. Net losses on loans totaled $1.0 billion for the year ended December 31, 2008 primarily resulting from downward changes in fair value on our portfolio of loans held for sale and losses on significant interests in 39 European loans that were sold in April 2008 compared to net losses on loans of $128.4 million for the year ended December 31, 2007. Net losses on investments and real estate totaled $326.9 million for the year ended December 31, 2008, primarily due to $182.4 million of impairment charges on real estate investments in our Asian Operations business segment and $56.4 million of impairment charges on those investment securities classified as available for sale that were previously in an unrealized loss position as of December 31, 2008 where we determined that we may no longer have the ability to hold these investment securities for a period of time sufficient to allow for recovery in fair value, compared to net gains of $65.1 million for the year ended December 31, 2007. Net losses on loans, investments and real estate were partially offset by an increase in other gains (losses), net. Other gains (losses), net included gains of $38.7 million on the sale of interests in entities established to facilitate the defeasance of securitized loans, substantially within our North American Lending and Mortgage Banking business segment, gains of $61.5 million on the repurchase and retirement of $192.5 million of our outstanding floating rate senior notes and net gains of $55.0 million related to the net interest settlement recognized periodically on substantially all of our hedging instruments for the year ended December 31, 2008. In addition, the results for the year ended December 31, 2007 included a $65.3 million non-recurring gain on the sale of a majority of our affordable housing debt platform.

Net gains totaled $12.6 million for the year ended December 31, 2007 compared to net gains of $117.3 million for the year ended December 31, 2006. The $104.7 million reduction in net gains was primarily driven by a decline in gains on loans of $257.3 million primarily due to an increase in valuation adjustments on our loans held for sale caused by adverse market conditions. In addition, net gains on the resolution of acquired non-performing loans declined $13.1 million. The reductions in net

gains were partially offset by an increase of $36.3 million of net gains on trading derivatives and investment securities, an increase of $44.6 million of net gains on real estate and equity investments and an increase of $84.8 million of other net gains. The increase in other net gains reflects a $65.3 million non-recurring gain on the sale of a majority of our affordable housing debt platform in February 2007 and a $7.1 million gain on the sale of our commercial real estate research division, Realpoint, in August 2007.

We earn fee-based income from our three core business lines. Fee-based income is generally recurring and periodic in nature and driven by, among other things, the volume of our origination activities, the size of our servicing portfolio and the amount of real estate-related assets under our management. Fee-based income consists primarily of the following:

Additionally, investment income includes our allocable share of the income or loss generated by our interests in joint ventures and partnerships that we account for under the equity method, which primarily consists of our (1) investments in affordable housing partnerships in the U.S., (2) investments in real estate equity investment funds in the U.S., (3) investments in real estate projects, joint ventures and real estate equity investment funds in Europe, and (4) investments in non-performing commercial loan and real estate joint ventures principally in Asia. Investment income also includes real estate investment income (generally net rental income) that is generated by investments in real property that we are required to consolidate under GAAP and includes properties located in Asia and certain properties owned by our lower-tier LIHTC partnerships.

The following table summarizes our sources of fee and investment income for the periods indicated (in thousands):

	Year ended December 31,

Fee and Investment Income	2008			2007		2006
Mortgage servicing fees	$	187,776		$	206,414	$	199,167
Placement fees		62,240			65,756		88,087
Investment banking fees(1)		27,656			62,504		60,270
Structuring fees and investment syndication income(1)		70,294			49,450		(37,937	)
Asset management fees		75,730			103,266		60,366
Trust fees		132,217			193,866		166,399
Other fees		12,625			53,685		75,176
Equity in (loss) income of joint ventures and partnerships		(206,227	)		56,018		67,842
Net real estate investment income(2)		73,832			81,820		68,126
Other income(2)		32,194			22,665		27,390

Total	$	468,337		$	895,444	$	774,886

Our fee and investment income totaled $468.3 million for the year ended December 31, 2008 compared to $895.5 million for the year ended December 31, 2007. The $427.2 million decrease was largely due to $206.2 million of equity in losses of investments in joint ventures and partnerships for the year ended December 31, 2008 caused by adverse market conditions that resulted in declines in the fair value of assets held in such ventures and partnerships compared to $56.0 million of equity in income of investments in joint ventures and partnerships for the year ended December 31, 2007. Fee and investment income also declined due to lower trust fees, lower investment banking fees, performance-based asset management fees earned in 2007 that were not achieved in 2008, and reduced other fees. Trust fees declined $61.7 million due to the lower interest rate environment. Investment banking fees declined $34.8 million due to a reduction in military housing placement volume. Asset management fees in total declined $27.6 million due to performance based fees earned in 2007 that were not achieved in 2008. Other fees declined $41.1 million due to lower transaction volume. These unfavorable variances were partly offset by a $20.8 million increase in structuring fees and investment syndication income due to a reduction in LIHTC loss reserves primarily due to the repeal of legislation in the third quarter of 2008 that previously required such reserves in connection with the affordable housing business.

Our fee and investment income totaled $895.5 million for the year ended December 31, 2007 compared to $774.8 million for the year ended December 31, 2006. The increase of $120.7 million was due primarily to increases of $87.4 million in structuring fees and investment syndication income due to a reduction in losses relating to LIHTC yield guarantees, $42.9 million in asset management fees primarily due to performance-based fees earned in 2007, $27.5 million in trust fees primarily due to an increase in the amount of escrow balances held at Escrow Bank, $7.2 million in mortgage servicing fees

primarily due to income earned on the resolution of a European CMBS investment and an increase in the European servicing portfolio and $13.7 million in net real estate investment income primarily from consolidated LIHTC partnerships. These favorable variances were partially offset by decreases of $22.3 million in placement fees primarily due to a reduction in loan origination volume attributed to market volatility in the second half of 2007, $21.5 million in other fees primarily due to the sale of EnableUs and $11.8 million in equity in income of joint ventures and partnerships primarily due to declines in fair value of assets held through such joint ventures and partnerships.

We maintain an allowance for loan losses on our loans held for investment in order to provide for the risk of credit losses inherent in the loan portfolio. To recognize increases in this allowance, we record a provision for loan losses in our consolidated statement of operations. These provisions are estimates and involve judgment and consideration of a number of factors including: our past loan experience; the current composition of the portfolio; historical credit migration; property type diversification; default; loss severity; industry loss experience; economic conditions and trends; and other relevant factors.

Our provision for loan losses totaled $179.7 million for the year ended December 31, 2008 compared to $32.7 million for the year ended December 31, 2007. The $147.0 million increase reflects an overall increase in our loans held for investment, an increase in impaired loans for which a specific allowance is recorded and the impact of declining asset quality on non-impaired loans due to challenging economic conditions. Declining asset quality resulted in an adverse risk-rating migration within the loan portfolio including an increase in impaired loans, delinquencies and defaults. Our loans held for investment include total impaired loans of $385.3 million and $101.2 million as of December 31, 2008 and 2007, respectively. Our allowance for loan losses on impaired loans totaled $50.1 million and $6.9 million as of December 31, 2008 and 2007, respectively.

Our provision for loan losses totaled $32.7 million for the year ended December 31, 2007 compared to $74.5 million for the year ended December 31, 2006. The $41.8 million reduction was primarily driven by a $45.9 million specific loan loss provision in 2006 relating to a single loan made in 2005 to a joint venture that invested in non-performing residential loans in Germany. We also made an equity investment of $28.3 million in the joint venture. The joint venture also issued debt to a third-party bank which was senior to our interest as mezzanine lender and joint venture partner. Throughout 2005 and 2006, we wrote off our joint venture interests and recognized an allowance for loan losses for the entire loan amount of $45.9 million due to the deteriorating financial condition of the joint venture. In late 2006, the joint venture solicited offers for the bulk sale of its loan portfolio. In 2007, following analysis of the bids received for the loan portfolio, we determined that recoveries on the mezzanine loan were unlikely due to the amount of existing senior debt. The mezzanine loan was fully charged off in the fourth quarter of 2007.

Noninterest expense consists primarily of compensation and benefits; amortization charges for mortgage servicing rights; costs for office space and equipment; professional fees for legal, accounting and other service providers; and other various expenses. A significant component of our compensation consists of commissions and other incentive compensation that is directly correlated to our revenues. Since the completion of the Sponsor Transactions on March 23, 2006, we have implemented a number of initiatives to reduce our operating costs. These measures have included changing our employee

compensation programs, consolidating our office facilities, reducing our staffing levels, reviewing and renegotiating certain vendor contracts and disposing of certain operations.

Noninterest expense is also partly driven by changes in the level of the amortization expense that we record with respect to our mortgage servicing rights. Mortgage servicing rights represent the capitalized value of the right to receive future cash flows from the related servicing activities and are amortized over the estimated life of the related loan or securitization transaction. The amount of amortization charges recorded with respect to our mortgage servicing rights is primarily driven by changes in the volume of mortgage servicing rights that we originate or acquire. Our amortization expense generally has increased in recent periods due to the growth of our servicing portfolio. We carry mortgage servicing rights at the lower of amortized cost or estimated fair value. The fair value of mortgage servicing rights is sensitive to changes in prevailing interest rates (which impact the discount rates that we use when valuing the rights) and tends to decrease when interest rates decline and to increase when interest rates rise. As described under "—Basis of Presentation—Presentation of Our Consolidated Results," the application of push down accounting in connection with the Sponsor Transactions resulted in an increase in the carrying value of our mortgage servicing rights, which has led to a further increase in the amount of amortization expense that we have recorded since March 23, 2006.

The following table summarizes our sources of noninterest expense for the periods indicated (in thousands):

	Year ended December 31,

Noninterest Expense	2008		2007		2006
Compensation and benefits	$	303,867	$	414,479	$	495,911
Amortization of mortgage servicing rights		139,557		130,457		121,008
Occupancy and equipment		77,781		107,203		101,544
Professional fees		114,554		102,882		113,036
Other expenses(1)		147,493		134,353		159,621

Total	$	783,252	$	889,374	$	991,120

Our noninterest expense totaled $783.3 million for the year ended December 31, 2008 compared to $889.4 million for the year ended December 31, 2007. The decline of $106.1 million was primarily due to a $110.6 million decrease in compensation and benefits due to lower fixed and variable compensation costs related to a reduction in headcount and the decline in operating results, and a $29.4 million decrease in occupancy and equipment primarily related to certain minority—owned entities we consolidate under applicable accounting guidance. These favorable variances were partly offset by an increase in professional fees of $11.7 million largely due to an increase in consulting services and the deferral of direct loan origination costs in 2007 that are no longer deferred in connection with our adoption of SFAS No. 159 effective January 1, 2008 and an increase in goodwill impairment of $22.7 million. We recorded goodwill impairment of $23.1 million in the year ended December 31, 2008 primarily due to the impact of adverse market conditions on the implied fair value of our reporting units.

Our noninterest expense totaled $889.4 million for the year ended December 31, 2007 compared to $991.1 million for the year ended December 31, 2006. The $101.7 million decrease primarily resulted from the decline in compensation and benefits and our expense management initiatives. Compensation and benefits declined $81.4 million largely due to a reduction in total headcount across our Company. Professional fees declined $10.1 million. Other expenses declined $25.4 million due largely to a reduction in data processing and telecommunications expense of $10.9 million and recognition of certain accounts receivable write-offs in 2006 that did not occur in 2007. These favorable variances were partially offset by a $9.5 million increase in our amortization of mortgage servicing rights due to a higher carrying value of mortgage servicing rights on our consolidated balance sheet and a $5.7 million increase in occupancy and equipment.

Our consolidated financial statements include the results of entities in which third parties own an economic interest. These entities consist primarily of our upper-tier and lower-tier LIHTC partnerships and certain other entities and commingled funds that are consolidated under applicable accounting guidance. The consolidation of these entities and funds in our financial statements requires us to recognize all of the revenues and all of the expenses that these entities and funds record during an accounting period. When calculating our net income, the portion of the net income or loss of consolidated entities and funds that are attributable to minority investors in those entities and funds is reflected as minority interest income or expense, as appropriate, in our consolidated statement of operations.

Our minority interest income totaled $110.5 million for the year ended December 31, 2008 compared to $124.4 million for the year ended December 31, 2007. The $13.9 million decrease was primarily due to the disposal of certain consolidated affordable housing partnerships partially offset by an increase in minority interest income in our North American Investments and Funds Management segment due to downward changes in fair value recognized in 2008 on certain commingled funds that we consolidate.

Our minority interest income totaled $124.4 million for the year ended December 31, 2007 compared to $65.6 million for the year ended December 31, 2006. The $58.8 million increase was concentrated in our Asian Operations and North American Lending and Mortgage Banking segments. Within our Asian Operations segment, minority interest expense decreased $43.7 million due largely to the sale of certain Japanese real estate investments in 2006 that were held in a 50% owned consolidated joint venture resulting in minority interest expense equal to the joint venture partner's 50% share of the gain. Within our North American Lending and Mortgage Banking segment, minority interest income increased $32.5 million due to an increase in minority interest income associated with certain NMTC partnerships that are consolidated under applicable accounting guidance. These favorable variances were partly offset by $32.1 million reduction in minority interest income required by the application of push down accounting and reported as a component of "Corporate and other."

We account for income taxes under the asset and liability method in accordance with SFAS No. 109, "Accounting for Income Taxes," or "SFAS No. 109." On January 1, 2007, we adopted FIN 48, "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109," or "FIN 48," which clarifies SFAS No. 109 by defining the confidence level that an income tax position must meet in order to be recognized in the financial statements. FIN 48 requires the tax effects of a position to be recognized only if it is "more-likely-than-not" to be sustained solely on its technical merits. The "more-likely-than-not" threshold represents a positive assertion by management that a company is entitled to the economic benefits of a tax position. If a tax position is not considered "more-likely-than-not" to be sustained based solely on its technical merits, no benefits of the tax position are to be recognized.

Our income tax expense totaled $8.3 million for the year ended December 31, 2008 compared to $166.8 million for year ended December 31, 2007 due to the change in pre-tax earnings and the recording of a valuation allowance. Although we recorded a pre-tax loss of $1.3 billion for the year ended December 31, 2008, the income tax expense was the result of establishing a $389.7 million valuation allowance as of December 31, 2008 on our federal and foreign deferred tax assets recognized primarily during 2008.

Our income tax expense, deferred tax assets and liabilities, and reserve for uncertain tax positions reflect management's best assessments of estimated future taxes to be paid. Significant judgments and estimates are required in determining the tax balances. As of December 31, 2008, we concluded that it was more likely than not that we would not generate sufficient future taxable income to realize all of our deferred tax assets. We evaluated all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. These assumptions require significant judgments and are consistent with the plans and estimates we are using to manage our underlying business. Our conclusion was based on consideration of the relative weight of the available evidence and the uncertainty of future market conditions on results of operations. As a result, we recorded a non-cash charge of $389.7 million in the consolidated statement of operations for the year ended December 31, 2008 related to the establishment of a valuation allowance on our federal and foreign deferred tax assets that are not more likely than not to be realized.

We recorded an income tax expense of $166.8 million for the year ended December 31, 2007 compared to an income tax expense of $59.2 million for the year ended December 31, 2006 due to an increase in pre-tax earnings and a higher effective tax rate in 2007 compared to 2006.

Through our North American Affordable Housing segment, we have worked with multi-family real estate developers who have received an allocation of low-income housing tax credits from the FHA. We have provided assistance in syndicating a significant amount of these tax credits to third-party investors by sponsoring LIHTC funds. The purpose of these funds is to provide the capital necessary to construct or renovate a multi-family property. The developer receives the cash proceeds from the syndication (less our syndication fees) to support development of the project and the limited partner investors receive the tax credits associated with the project. In a LIHTC fund, investors acquire limited partner interests in an upper-tier investment partnership, which in turn invests as a limited partner in one or more lower-tier partnerships that own and operate multifamily properties. Investors in our LIHTC

funds are most often corporations seeking to benefit from tax credits and tax losses that are generated by a lower-tier partnership's multifamily properties. We have historically acquired interests in new lower-tier partnerships in contemplation of transferring those interests to a new LIHTC fund following its capitalization. This "warehousing" of interests in lower-tier partnerships has given rise to financing costs.

As a sponsor of LIHTC funds, we have received structuring fees and investment syndication income for organizing the fund, coordinating the fund's capital raising and arranging investments by the upper-tier partnership in one or more lower-tier partnerships, and we generally are paid asset management fees for the ongoing administration of a fund. We recognized a portion of these structuring fees and investment syndication income when our services were completed and collection was reasonably assured. We also earn asset management fees for services provided to the LIHTC funds during the tax compliance period of the lower-tier partnership. These fees are recognized as earned and included in asset management fees in the consolidated statement of operations.

We have provided investment yield guarantees to investors in many of the LIHTC funds we sponsor. When we provided such a guarantee, a portion of the structuring fees and investment syndication income was deemed to be a fee in respect of the guarantee. We sometimes refer to that portion of the structuring fees and investment syndication income as "guarantee fees" in this document. These guarantee fees were deferred when received, and are amortized into income in each reporting period in proportion to the amounts of tax benefits and performance returns that are delivered to investors in satisfaction of the yield guarantees. This activity is reflected in real estate syndication proceeds and related liabilities in our consolidated balance sheet. If a guaranteed LIHTC fund is unable to generate the yield required under the guarantee agreement through delivery of tax credits or losses to the guaranteed investors, we are obligated to pay the shortfall to the investors, or otherwise to bear the costs to improve the performance of the fund and enable it to generate the guaranteed yield.

In updating our estimates of exposure to loss under the guarantee agreements, we gather information quarterly relating to the performance of lower-tier partnerships and underlying real estate projects, including compliance with relevant regulations governing low-income housing tax credits. Estimates of future performance are then developed and/or updated, including estimating the likelihood and amount of payments that may be required under the guarantee agreements. If, based on these quarterly estimates, we determine that the amount of projected payments and costs that are probable and estimable exceed the balance of unamortized deferred guarantee fees recorded in real estate syndication proceeds and related liabilities in our consolidated balance sheet (after taking into account working capital reserves within the underlying LIHTC funds), we recognize an additional liability under the provisions of SFAS No. 5, "Accounting for Contingencies," or "SFAS No. 5." Any revisions to the liability estimates under SFAS No. 5 are reflected in real estate syndication proceeds and related liabilities in each quarter. The amount in real estate syndication proceeds and related liabilities is reduced for actual costs that we incur to deliver the guaranteed yield. For more information regarding our estimation of yield guarantee exposure, see "—Critical Accounting Estimates—Liability for Low-Income Tax Credit Guarantees." The roll-forwards of the real estate syndication proceeds and related liabilities for the years ended December 31, 2008 and 2007 and the

periods from March 23, 2006 to December 31, 2006 and January 1, 2006 to March 22, 2006 are presented below.

	Successor									Predecessor

	Year ended December 31, 2008			Year ended December 31, 2007			Period from March 23, 2006 to December 31, 2006			Period from January 1, 2006 to March 22, 2006
	(in thousands)
Real estate syndication proceeds and related liabilities, beginning of period	$	1,563,151		$	1,984,206		$	1,793,854		$	1,239,376
Release of liability from delivery of tax credits to guarantee fund investors		(182,409	)		(318,434	)		(132,609	)		(38,519	)
Proceeds from additional guarantee fund investor installments		46,492			262,485			240,387			73,927
Amortization of deferred guarantee fees		(31,402	)		(24,694	)		(29,658	)		(992	)
Change in guarantee liability estimates		(51,362	)		(17,027	)		25,084			53,326
Fair value guarantee liability established through push down accounting		—			—			356,179			—
Change in installments due from guarantee fund investors		(46,492	)		(164,877	)		(253,981	)		466,788
Payments made to real estate syndication funds under guarantee obligations		(39,235	)		(158,508	)		(15,050	)		(52	)

Real estate syndication proceeds and related liabilities, end of period	$	1,258,743		$	1,563,151		$	1,984,206		$	1,793,854

The following table presents the components of real estate syndication proceeds and related liabilities as of the dates indicated below.

Our maximum exposure to loss as of December 31, 2008 was $1.6 billion, representing the $0.9 billion financing liability included in the consolidated balance sheet (a component of real estate syndication proceeds and related liabilities) plus $0.7 million of guaranteed yield due to the unaffiliated investors on their initial investment. The maximum exposure to loss represents the amount payable to investors in the event of liquidation of the partnerships. Our exposure to loss increased as unaffiliated investors placed additional guaranteed commitments with us, and decreased as tax benefits were delivered to the investors.

In terms of reflection in the accompanying consolidated statement of cash flows, amounts pertaining to the release of real estate syndication proceeds and related liabilities resulting from delivery of tax credits to guarantee fund investors are reflected as extinguishment of real estate syndication proceeds, a component of operating activities. Increases resulting from additional guarantee fund investor installments are included in real estate syndication proceeds received, a component of financing activities. Amortization of deferred guarantee fees and changes in guarantee liability estimates are reflected in other real estate syndication activities, a component of operating activities. The fair value guarantee liability recognized through push down accounting is included in the "impact of push down accounting on stockholders' equity" in "Non-cash Investing and Financing Activities" for the period from March 23, 2006 to December 31, 2006. The change in installment payments due from guarantee fund investors is included as a component of "Net change in accounts and other receivables" within operating activities.

We recognize tax credits from our investments in low-income housing partnerships as a reduction to income tax expense in the consolidated statement of operations to the extent that they can be utilized.

Our LIHTC operations have experienced difficulties that have negatively impacted the performance of our North American Affordable Housing segment and adversely affected our overall results.

In connection with the application of push down accounting to our consolidated financial statements, we increased the carrying value of the liability associated with our guaranteed LIHTC funds (which is recorded on our consolidated balance sheet as real estate syndication proceeds and related liabilities) to its fair value as of the closing of the Sponsor Transactions, which resulted in a $401.7 million increase in the aggregate carrying value of this liability to $664.5 million as of March 23, 2006. To the extent this liability exceeds the expected losses associated with our LIHTC guarantees, we amortize that excess using a systematic method, which approximates straight-line amortization over the period of delivery of the tax benefits to investors, except that amortization of the liability for a particular fund may be accelerated when certain events occur and result in partial settlement of the guarantee, such as the sale of a lower-tier partnership and related settlement with the guaranteed investors. As of March 23, 2006, we estimated that $410.8 million of the guarantee liability as of that date would be amortized into future income and $207.5 million would be utilized to cover estimated guarantee costs. As of December 31, 2008, we estimated that, of our total LIHTC related guarantee liability of $318.6 million at that date, $188.8 million would be amortized to future income and $129.8 million would be utilized to cover expected costs relating to performance under the yield guarantees. We reevaluate these estimates on a quarterly basis and it is likely that our estimates will continue to change based on changes in the future performance of our LIHTC business. The amortization of this liability resulted in $34.4 million, $31.4 million and $29.0 million of income for the years ended December 31, 2008, 2007 and 2006, respectively. These amounts include amortization of asset management fees relating to the management of the LIHTC funds over the expected terms of the yield guarantees. However, the amortization of these liabilities does not provide us with a source of cash for funding any advances or payments that we may be required to make in connection with our LIHTC operations. Future developments affecting our LIHTC business or other factors may cause us to revise our expectations for our LIHTC operations, which could result in additional charges.

We have made significant changes to our business plan for our LIHTC operations in response to the developments described above. These changes are designed to reduce adverse impacts that our LIHTC operations may have on our future results of operations while enabling us to continue to fulfill our obligations to the LIHTC funds for which we serve as the general partner. Our primary focus with respect to our LIHTC operations is now on managing our existing funds. We do not expect to sponsor additional LIHTC funds in the future and we may consider opportunities to reduce our liabilities relating to existing guaranteed LIHTC funds by transferring guarantee liabilities in respect of our general partner interests in the funds that we have sponsored. We expect to continue to face challenges in our LIHTC business but believe that the changes in our business plan for our LIHTC operations have reduced the uncertainties in those operations.

When we sponsor a guaranteed LIHTC fund, we account for the syndication as a financing rather than as a sale under the requirements of SFAS No. 66. The requirement to reflect the transaction as a financing is triggered by our continuing involvement in the fund in the form of the yield guarantee. When accounting for the syndication as a financing, we retain the assets (generally cash, cash equivalents and equity investments) of the upper-tier partnership on our consolidated balance sheet, and we reflect the syndication proceeds from third-party investors as liabilities on our consolidated balance sheet.

In certain cases, we are required to consolidate lower-tier partnerships and upper-tier partnerships for which we have not guaranteed yields under the requirements of FIN 46(R). This requirement is triggered when we are deemed to be the "primary beneficiary," as defined in FIN 46(R), in a partnership. When we consolidate a partnership under FIN 46(R), we recognize its assets (primarily cash and equity investments for upper-tier partnerships and real estate investments for lower-tier partnerships) and its liabilities (primarily long-term borrowings for lower-tier partnerships) on our

consolidated balance sheet, and we reflect the equity interests of third-party investors in the partnership as a minority interest in our consolidated balance sheet. Consolidation of a LIHTC fund under FIN 46(R) generally results in the same amount of net income reported in our consolidated statement of operations as would be reported under the equity method of accounting. However, certain line items within the consolidated statement of operations include gross amounts of income and expense recorded at the fund level, the net of which is offset by minority interest expense or income to the extent the economic interests of the partnerships are passed through to third-party investors. These line items would be netted against one another under the equity method of accounting.

The following tables present the amounts that were included in our consolidated financial statements as a result of the application of the accounting principles described above as of the dates and for the periods indicated. These accounting principles result in a gross-up of our assets and liabilities as well as a gross-up of our revenues, expenses and minority interest income as presented below.

	As of December 31,

	2008		2007		2006
	(in thousands)
LIHTC Balance Sheet Impact:
Total assets	$	1,144,794	$	1,508,608	$	1,964,736
Total borrowings		180,413		335,879		323,820
Real estate syndication proceeds and related liabilities		940,176		1,123,146		1,537,224
Other liabilities		24,205		24,616		(75,926	)
Minority interest		—		24,967		179,618
Stockholders' equity		—		—		—

	Year ended December 31,

	2008			2007			2006
	(in thousands)
LIHTC Income Statement Impact:
Net interest income	$	(32,421	)	$	(35,062	)	$	(30,509	)
Noninterest income		50,727			35,197			13,983
Noninterest expense		43,933			72,640			55,119
Minority interest income		25,627			72,505			71,645

Income before income taxes	$	—		$	—		$	—

To reconcile our management reporting of our segment financial information to amounts included in our consolidated financial statements, we have excluded certain items from our segment reporting and categorized them as "Corporate and other." As previously described, our six reportable business segments do not include certain corporate overhead expenses, certain immaterial businesses, allocation of income taxes, adjustments required by push down accounting, or any other eliminations, reclassifications or other adjustments that are made to conform our management reporting to our consolidated financial statements.

The loss before income taxes in our "Corporate and other" category totaled $119.4 million for the year ended December 31, 2008 compared to $209.1 million for the year ended December 31, 2007. These amounts include unallocated personnel-related expenses for corporate departments such as accounting, tax, treasury, risk management, legal, information technology, human resources, facilities and internal audit. In addition, as described above, these amounts include the impact of push down accounting. The $89.7 million decrease was due to a decrease in the loss before income taxes of

$34.5 million associated with push down accounting combined with a decrease in the loss before income taxes of $55.2 million associated with corporate functions and immaterial businesses.

The loss before income taxes totaled $209.1 million for the year ended December 31, 2007 compared to $234.5 million for the year ended December 31, 2006. The $25.4 million decrease was due to a decrease in the loss before income taxes of $33.1 million associated with corporate functions and immaterial businesses offset by an increase in the loss before income taxes of $7.7 million associated with push down accounting.

The following table summarizes the results of operations of our North American Lending and Mortgage Banking segment for the periods indicated (in thousands):

		Year ended December 31,

		2008			2007		2006
Net interest income		$	320,595		$	287,500	$	231,647
Noninterest income			(413,205	)		155,382		403,387

	Total revenue		(92,610	)		442,882		635,034
Provision for loan losses			101,783			18,757		8,588

	Net revenue		(194,393	)		424,125		626,446
Noninterest expense			215,193			298,671		295,819

(Loss) income before minority interest and income taxes			(409,586	)		125,454		330,627
Minority interest income			36,026			44,951		12,534

(Loss) income before income taxes		$	(373,560	)	$	170,405	$	343,161

Our North American Lending and Mortgage Banking segment reported a loss before income taxes of $373.6 million for the year ended December 31, 2008 compared to income before income taxes of $170.4 million for the year ended December 31, 2007. The $544.0 million decrease was driven primarily by adverse market conditions resulting in downward changes in fair value on our portfolio of loans held for sale, increased loan loss reserves and a decrease in fee income. These negative trends were partially offset by lower noninterest expense and higher net interest income.

Net interest income totaled $320.6 million for the year ended December 31, 2008 compared to $287.5 million for the year ended December 31, 2007. The $33.1 million increase was primarily the result of a $27.2 million increase in accretion income on loans transferred to held for investment in the second half of 2007 that were previously classified as held for sale. Additionally, an increase in portfolio yields, partially attributed to the impact of loans structured with interest rate floors that were above contractual benchmark rates, substantially offset an increase in funding costs attributed to market illiquidity.

Noninterest income was a negative $413.2 million for the year ended December 31, 2008 compared to a positive $155.4 million for the year ended December 31, 2007. The $568.6 million decline was driven by an increase in net losses and a decrease in placement fees and investment banking fees. Net losses totaled $561.0 million for the year ended December 31, 2008 compared to net losses of $134.8 million for the year ended December 31, 2007. The $426.2 million increase in net losses was primarily attributable to a $414.6 million increase in downward changes in fair value on loans held for sale due to adverse market conditions. Gains recognized from the sale of loans decreased $69.6 million

due to the absence of securitization transactions during the year ended December 31, 2008. All other gains increased $58.0 million primarily as a result of a gain of $36.9 million on the sale of interests in entities established to facilitate the defeasance of securitized loans in 2008. Placement fees declined $94.2 million due to a decrease in loan origination volume to $9.8 billion in 2008 from $23.5 billion in 2007. Investment banking fees declined $33.0 million due primarily to a reduction in military housing placement volume to $578.3 million in 2008 from $2.1 billion in 2007. All other noninterest income decreased $15.1 million primarily due to lower exit fees (a component of other fees in our consolidated statement of operations) earned on loan payoffs where Capmark does not place the new debt, and lower equity in income of joint ventures and partnerships.

The provision for loan losses totaled $101.8 million for the year ended December 31, 2008 compared to $18.8 million for the year ended December 31, 2007. The $83.0 million increase in provision for loan losses was primarily due to the impact of adverse risk-rating migration due to challenging economic conditions within the loan portfolio, an overall increase in our loans held for investment and an increase in impaired loans for which a specific allowance is recorded.

Noninterest expense totaled $215.2 million for the year ended December 31, 2008 compared to $298.7 million for the year ended December 31, 2007. The $83.5 million decrease was primarily driven by a $91.6 million decline in compensation and benefits due to a reduction in incentive compensation related to a decline in loan origination volume and operating results partially offset by a $26.5 million impairment of goodwill. We recorded goodwill impairment due to the impact of adverse market conditions on the implied fair value of the reporting unit. All other noninterest expense decreased $18.4 million primarily due to a reduction in loan origination activities.

Minority interest income totaled $36.0 million for the year ended December 31, 2008 compared to $45.0 million for the year ended December 31, 2007. The $9.0 million decrease was due to a decrease in minority interest income associated with certain new markets tax credit ("NMTC") partnerships that are consolidated under applicable accounting guidance. The majority of the decrease was due to a reduction in the provision for loan losses and valuation losses that are allocated to the minority interest holders of such NMTC partnerships. The decrease in provision for loan losses and valuation losses resulted in a decrease in minority interest income equal to the third-party investors' allocation of such provision.

Our North American Lending and Mortgage Banking segment reported income before income taxes of $170.4 million for the year ended December 31, 2007 compared to $343.2 million for the year ended December 31, 2006. The $172.8 million decrease was driven largely by higher valuation adjustments on loans held for sale, a component of noninterest income, and a higher provision for loan losses, partially offset by higher net interest income and minority interest income.

Net interest income totaled $287.5 million for the year ended December 31, 2007 compared to $231.6 million for the year ended December 31, 2006. The $55.9 million increase was primarily the result of an increase in interest-earning assets. Total assets as of December 31, 2007 were $12.2 billion compared to $9.2 billion as of December 31, 2006.

Noninterest income totaled $155.4 million for the year ended December 31, 2007 compared to $403.4 million for the year ended December 31, 2006. The $248.0 million decrease was driven by lower net gains and placement fees partially offset by higher investment banking fees. Net gains decreased $252.6 million for the year ended December 31, 2007 compared to the same period in 2006. Realized gains recognized from the sale of mortgage loans decreased $60.0 million due primarily to a reduction in fixed-rate securitization profitability and volume driven by widening CMBS bond spreads. Additionally, unrealized losses increased $186.0 million for the year ended December 31, 2007 compared to the same period in 2006, relating to an increase in valuation charges on loans held for

sale. All other net gains declined $6.7 million as lower net gains on hedging activities were partially offset by higher net gains attributed to the capitalization of originated mortgage servicing rights. Placement fees decreased $13.2 million due to a decrease in loan origination volume attributed to market volatility in the second half of 2007. Investment banking fees increased $18.0 million primarily due to a $1.3 billion increase in military housing bond placements.

The provision for loan losses totaled $18.8 million for the year ended December 31, 2007 compared to $8.6 million for the year ended December 31, 2006. The $10.2 million increase was attributed to an increase in mortgage loans held for investment resulting from the transfer of approximately $4.5 billion of mortgage loans from "held for sale" to "held for investment" in the second half of 2007 because of our intent and ability to hold such loans until maturity.

Noninterest expense totaled $298.7 million for the year ended December 31, 2007 compared to $295.8 million for the year ended December 31, 2006. The $2.9 million increase was driven primarily by a $29.3 million increase in the recognition of deferred costs associated with loan originations that was partially offset by a $23.7 million reduction in compensation and benefits expense attributable to a reduction in total headcount.

Minority interest income totaled $45.0 million for the year ended December 31, 2007 compared to $12.6 million for the year ended December 31, 2006. The $32.4 million increase was attributed to an increase in the minority interest income associated with certain NMTC partnerships that are consolidated under applicable accounting guidance. The majority of the increase is attributed to valuation adjustments, recognized as a component of net gains (losses), and provision for loan losses in our consolidated statement of operations that are allocated to the minority interest holders of such NMTC partnerships. The increase in valuation adjustments and provision for loan losses resulted in an increase to minority interest income equal to the third-party investors' allocation of such valuation adjustments and provisions.

The following table summarizes the results of operations of our North American Investments and Funds Management segment for the periods indicated (in thousands):

		Year ended December 31,

		2008			2007		2006
Net interest income		$	2,651		$	8,333	$	14,179
Noninterest income			(196,420	)		209,905		236,414

	Total revenue		(193,769	)		218,238		250,593
Provision for loan losses			—			278		(788	)

	Net revenue		(193,769	)		217,960		251,381
Noninterest expense			35,433			75,896		102,664

(Loss) income before minority interest and income taxes			(229,202	)		142,064		148,717
Minority interest income (expense)			42,965			7,488		(5,075	)

(Loss) income before income taxes		$	(186,237	)	$	149,552	$	143,642

Our North American Investments and Funds Management segment incurred a loss before income taxes of $186.2 million for the year ended December 31, 2008 compared to income before income taxes of $149.5 million for the year ended December 31, 2007. The $335.7 million decrease was primarily driven by a reduction in income from equity investments in joint ventures and partnerships due to

downward changes in the fair value of investment funds in which we co-invest with third-party investors, and losses from downward changes in the fair value of investment securities and loans.

Net interest income totaled $2.7 million for the year ended December 31, 2008 compared to $8.3 million for the year ended December 31, 2007. The $5.6 million decrease was primarily due to a decline in average interest-earning assets, as well as a decline in interest rates, for the year ended December 31, 2008 compared to the year ended December 31, 2007.

Noninterest income was a negative $196.4 million for the year ended December 31, 2008 compared to a positive $209.9 million for the year ended December 31, 2007. The $406.3 million decrease was primarily the result of losses on equity investments in joint ventures and partnerships, losses from downward changes in fair value of investment securities and loans, and lower placement fees and asset management fees. Our income from equity investments in joint ventures and partnerships includes the results of certain commingled funds that we consolidate. Income from equity investments in joint ventures and partnerships, excluding asset sales, decreased $233.9 million primarily due to declines in the fair value of assets held through such joint ventures and partnerships. Gains from asset sales executed through joint ventures and partnerships decreased $26.5 million from the prior year due to a reduction in sales activity. Net losses incurred from downward changes in fair value of loans increased $33.9 million due to continuing adverse market conditions. The current year losses were partially offset by a $5.0 million non-recurring gain from the principal repayment of a loan previously charged off. Net losses incurred from downward changes in fair value of investment securities amounted to $26.7 million for the year ended December 31, 2008, due to adverse market conditions, compared to net gains of $20.6 million for the year ended December 31, 2007 primarily due to realized gains on the sale of certain CMBS investments in 2007. The year ended December 31, 2007 also included non-recurring gains of $14.2 million resulting from the sale of our former commercial real estate research division, Realpoint, and the remaining property held in another division. These divisions also produced operating income of $7.7 million in 2007. Additionally, placement fees declined $25.6 million due to fewer real estate equity transactions upon which we earn such fees. Asset management fees declined $14.6 million due to fees earned in 2007 related to achieving certain performance criteria, the liquidation of an investment fund and the final close of an investment fund.

Noninterest expense totaled $35.4 million for the year ended December 31, 2008 compared to $75.9 million for the year ended December 31, 2007. The $40.5 million decrease was primarily due to a reduction in incentive compensation expense of $38.6 million related to the decline in operating results.

Minority interest income was $43.0 million for the year ended December 31, 2008 compared to $7.5 million for the year ended December 31, 2007. The $35.5 million increase was primarily due to downward changes in fair value recognized in 2008 on certain commingled funds that we consolidate. The downward changes in fair value resulted in an increase in minority interest income equal to the third-party investors' share of such losses.

Our North American Investments and Funds Management segment reported income before income taxes of $149.5 million for the year ended December 31, 2007 compared to $143.6 million for the year ended December 31, 2006. The $5.9 million increase resulted primarily from a reduction in noninterest expense and an increase in minority interest income partially offset by a reduction in net interest income and noninterest income.

Net interest income totaled $8.3 million for the year ended December 31, 2007 compared to $14.2 million for year ended December 31, 2006. The $5.9 million decrease was due to a reduction in average interest-earning assets for the year ended December 31, 2007 compared to the year ended December 31, 2006.

Noninterest income totaled $209.9 million for the year ended December 31, 2007 compared to $236.4 million for the year ended December 31, 2006. The $26.5 million decrease was primarily the result of lower equity in income of joint ventures and partnerships of $66.0 million due to valuation adjustments recognized in a commingled fund that we consolidate and significant gains generated in 2006 from the refinancing of a CDO. This decrease was partially offset by higher placement fee income of $12.9 million due to increased equity placements and an increase in net gains of $26.1 million due to lower valuation adjustments on investment securities year-over-year as well as gains from the sale of Realpoint and a real estate investment property.

Noninterest expense totaled $75.9 million for the year ended December 31, 2007 compared to $102.7 million for the year ended December 31, 2006. The $26.8 million decrease was driven by a reduction in professional fees of $23.6 million due to expenses incurred in 2006 to launch a new structured debt fund and a decrease in incentive compensation expense of $3.7 million.

Minority interest income was $7.5 million for the year ended December 31, 2007 compared to minority interest expense of $5.1 million for the year ended December 31, 2006. The $12.6 million variance was primarily due to valuation adjustments recognized in a commingled fund that we consolidate. The valuation adjustments that we recognized resulted in minority interest income equal to the third-party investors' share of such losses.

The following table summarizes the results of operations of our North American Servicing segment for the periods indicated (in thousands):

		Year ended December 31,

		2008			2007			2006
Net interest income		$	(18,355	)	$	(6,634	)	$	(7,935	)
Noninterest income			306,290			403,756			406,653

	Total revenue		287,935			397,122			398,718
Provision for loan losses			—			(87	)		1,038

	Net revenue		287,935			397,209			397,680
Noninterest expense			188,610			205,176			243,156

Income before minority interest and income taxes			99,325			192,033			154,524
Minority interest income			—			—			—

Income before income taxes		$	99,325		$	192,033		$	154,524

Our North American Servicing segment had income before income taxes of $99.3 million for the year ended December 31, 2008 compared to $192.1 million for the year ended December 31, 2007. The $92.8 million decrease was primarily driven by lower noninterest income, partially offset by lower noninterest expense.

Net interest income totaled a negative $18.4 million for the year ended December 31, 2008 compared to a negative $6.6 million for the year ended December 31, 2007. The $11.8 million decrease was primarily driven by a lower interest rate environment which resulted in a reduction of $30.8 million in interest income earned on escrow balances maintained at third party banks. This was partially offset by $12.2 million of lower interest expense on balance sheet assets and $6.5 million of lower interest expense paid to borrowers.

Noninterest income totaled $306.3 million for the year ended December 31, 2008 compared to $403.8 million for the year ended December 31, 2007. The $97.5 million decrease was driven by lower trust fees, mortgage servicing fees, other fees, and net gains. Trust fees are interest rate sensitive and decreased $64.9 million due to the lower interest rate environment. Mortgage servicing fees decreased $17.3 million primarily as a result of lower assumption fees and a shift toward assets which generated lower fees. Assumption fees are a component of mortgage servicing fees in our consolidated statement of operations, and we earn an assumption fee when an existing borrower's mortgage is assumed by a new borrower. Assumption transactions and related fees have declined due to declining real estate transaction volumes resulting from the real estate market downturn, including lack of transactions due to market inactivity. Other fees declined $13.6 million and net gains declined $1.3 million primarily as a result of lower defeasance fees and the absence of revenues and gain on sale from our former technology subsidiary, EnableUS, Inc., which was sold during the year ended December 31, 2007. Defeasance fees are a component of other fees in our consolidated statement of operations, and we earn a defeasance fee when a borrower pays off its mortgage through substitution of other collateral. Defeasance transactions also declined due to adverse market conditions in the year ended December 31, 2008.

Noninterest expense totaled $188.6 million for the year December 31, 2008 compared to $205.2 million for the year ended December 31, 2007. The $16.6 million decrease was primarily driven by lower incentive compensation related primarily to the decline in operating results.

Our North American Servicing segment reported income before income taxes totaling $192.1 million for the year ended December 31, 2007 compared to $154.5 million for the year ended December 31, 2006. The $37.6 million increase was primarily driven by lower noninterest expense offset, in part, by a reduction in noninterest income.

The segment recorded negative net interest income of $6.6 million for the year ended December 31, 2007 compared to negative net interest income of $7.9 million for the year ended December 31, 2006. The $1.3 million improvement in net interest income was due to several offsetting factors. Net interest income increased due to a $17.8 million increase in earnings on escrow balances at third party banks, and a $1.2 million increase in interest earned by Escrow Bank on higher cash balances. These favorable variances were partially offset by a $4.7 million increase in interest expense paid to borrowers on their escrow balances, a $2.6 million increase in the segment's interest expense allocation based on higher asset balances, a $3.6 million counterparty interest expense payment in connection with hedging escrow balances, a $2.2 million reduction in payoff interest, and a $4.1 million decrease in interest income on servicing advances.

Noninterest income totaled $403.8 million for the year ended December 31, 2007 compared to $406.6 million for the year ended December 31, 2006. Noninterest income in our North American Servicing segment is primarily fee-based. The $2.8 million decrease was driven by lower mortgage servicing fees, asset management fees, and the absence of revenues from our former technology subsidiary, EnableUS, Inc., sold in April 2007. The segment experienced a $6.4 million decline in mortgage servicing fees primarily due to reduced assumption activity, a $2.8 million decline in special servicing asset management fees, and a reduction in all other noninterest income of $15.1 million primarily due to the sale of EnableUS, Inc. These unfavorable variances were partially offset by higher net gains and trust fees. In connection with the sale of EnableUS, Inc., we recognized a $6.2 million gain (excluding the impact of push down accounting reflected in "Corporate and other"). Trust fees increased $15.3 million as a result of increased fees earned from escrow services provided and an increase in the amount of escrow balances held at Escrow Bank.

Noninterest expense totaled $205.2 million for the year ended December 31, 2007 compared to $243.2 million for the year ended December 31, 2006. The $38.0 million decrease was driven by reductions in compensation and benefits, and all other noninterest expenses. Compensation and benefits expense decreased $19.8 million largely due to headcount reductions. All other noninterest expenses decreased $18.2 million reflecting general reductions in occupancy and equipment, professional fees, data processing and telecommunications, travel and entertainment, and other expenses. The absence of expenses generated by EnableUS, Inc. subsequent to the aforementioned sale and a legal settlement in the prior year contributed to the general expense reductions.

The following table summarizes the results of operations of our Asian Operations segment for the periods indicated (in thousands):

		Year ended December 31,

		2008			2007			2006
Net interest income		$	13,380		$	55,073		$	79,502
Noninterest income			(144,787	)		156,576			168,917

	Total revenue		(131,407	)		211,649			248,419
Provision for loan losses			76,322			11,934			15,635

	Net revenue		(207,729	)		199,715			232,784
Noninterest expense			84,520			90,892			82,361

(Loss) income before minority interest and income taxes			(292,249	)		108,823			150,423
Minority interest income (expense)			2,709			(2,476	)		(46,164	)

(Loss) income before income taxes		$	(289,540	)	$	106,347		$	104,259

Our Asian Operations segment incurred a loss before income taxes of $289.5 million for the year ended December 31, 2008 compared to income before income taxes of $106.4 million for the year ended December 31, 2007. The $395.9 million decrease was driven primarily by reductions in noninterest income and net interest income and an increase in provision for loan losses.

Net interest income totaled $13.4 million for the year ended December 31, 2008 compared to $55.1 million for the year ended December 31, 2007. The $41.7 million decrease was attributable to a reduction in the size of our portfolio of acquired non-performing loans, which resulted in real estate investments that are not interest-earning assets comprising a larger percentage of our balance sheet.

Noninterest income was a negative $144.8 million for the year ended December 31, 2008 compared to a positive $156.6 million for the year ended December 31, 2007. The $301.4 million decrease was driven primarily by net losses. Net losses totaled $211.7 million for the year ended December 31, 2008 compared to net gains of $74.4 million for the year ended December 31, 2007. The unfavorable variance of $286.1 million was due to real estate impairment charges of $182.4 million and downward changes in fair value of loans held for sale totaling $51.1 million, $10.9 million of impairment charges on those investment securities classified as available for sale that were previously in an unrealized loss position as of December 31, 2008 where we determined that we may no longer have the ability to hold these investment securities for a period of time sufficient to allow for recovery in fair value, and higher opportunistic sales of certain real estate investments in 2007.

The provision for loan losses totaled $76.3 million for the year ended December 31, 2008 compared to $11.9 million for the year ended December 31, 2007. The $64.4 million increase was primarily due to losses on our portfolio of acquired non-performing loans.

Noninterest expense totaled $84.5 million for the year ended December 31, 2008 compared to $90.9 million for the year ended December 31, 2007. The $6.4 million decrease was mainly attributable to a reduction in compensation and benefits of $6.0 million due to staff reductions and a decline in operating results.

Minority interest income was $2.7 million for the year ended December 31, 2008 compared to minority interest expense of $2.5 million for the year ended December 31, 2007 due to the impairment of certain Japanese real estate investments in 2008 that were held in a consolidated joint venture resulting in minority interest income equal to the joint venture partner's share of the losses.

Our Asian Operations segment reported income before income taxes of $106.4 million for the year ended December 31, 2007 compared to $104.3 million for the year ended December 31, 2006. The $2.1 million increase was primarily driven by a reduction in minority interest expense.

Net interest income totaled $55.1 million for the year ended December 31, 2007 compared to $79.5 million for the year ended December 31, 2006. The $24.4 million decrease was attributable to a reduction in the balance of acquired non-performing loans and an increase in real estate investments that are not interest-earning assets. The decrease in the balance of acquired non-performing loans was driven by resolutions or sales of such loans and fewer acquisitions, with certain proceeds reinvested in noninterest-earning real estate investments.

Noninterest income totaled $156.6 million for the year ended December 31, 2007 compared to $168.9 million for the year ended December 31, 2006. The $12.3 million decrease was driven primarily by lower net gains partially offset by higher net real estate investment income and fee income. Net gains decreased $55.0 million due to the opportunistic sales of certain Japanese real estate investments during the year ended December 31, 2006. Certain of these investments were held in a joint venture and approximately 50% of the gain recorded in connection with these sales was offset by a corresponding increase in minority interest expense. Fee income increased $34.9 million due mainly to a promote fee of $15.1 million from a joint venture partner in a Japanese real estate investment, acquisition fees of $1.0 million from a real estate joint venture established in 2007, an increase of $5.4 million in loan origination fees and loan exit fees due to higher rates, and income of $8.3 million from a consolidated real estate investment.

Noninterest expense totaled $90.9 million for the year ended December 31, 2007 compared to $82.4 million for the year ended December 31, 2006. The $8.5 million increase was mainly attributable to expenses of $8.2 million from a consolidated real estate investment. In addition, lower data processing and telecommunications expenses and lower compensation and benefits were partially offset by higher property inspection fees and loan processing fees. Data processing and telecommunications expenses decreased $2.6 million due to lower maintenance and repairs. Compensation and benefits expense decreased $2.9 million primarily due to lower incentive compensation. Property inspection fees increased $3.3 million due to the volume of real estate acquisitions. Loan processing fees increased by $1.7 million due to brokerage fees on real estate and non-performing loan dispositions.

Provision for loan losses totaled $11.9 million for the year ended December 31, 2007 compared to $15.6 million for the year ended December 31, 2006. The $3.7 million decrease was due to fewer impairment losses recognized on acquired non-performing loans.

Minority interest expense totaled $2.5 million for the year ended December 31, 2007 compared to $46.1 million for the year ended December 31, 2006. The $43.6 million decrease was due largely to the

sale of certain Japanese real estate investments in 2006 that were held in a 50% owned consolidated joint venture resulting in minority interest expense equal to the joint venture partner's 50% share of the gain.

The following table summarizes the results of operations of our European Operations segment for the periods indicated (in thousands):

		Year ended December 31,

		2008			2007			2006
Net interest income		$	20,528		$	36,908		$	27,584
Noninterest income			(391,646	)		52,006			64,643

	Total revenue		(371,118	)		88,914			92,227
Provision for loan losses			2,702			(362	)		46,588

	Net revenue		(373,820	)		89,276			45,639
Noninterest expense			34,695			53,787			67,485

(Loss) income before minority interest and income taxes			(408,515	)		35,489			(21,846	)
Minority interest expense			—			—			(1,338	)

(Loss) income before income taxes		$	(408,515	)	$	35,489		$	(23,184	)

Our European Operations segment incurred a loss before income taxes of $408.5 million for the year ended December 31, 2008 compared to income before income taxes of $35.5 million for the year ended December 31, 2007. The $444.0 million decrease was primarily due to net realized and unrealized losses primarily resulting from significant downward changes in fair value recognized on our portfolio of loans held for sale in Europe.

Net interest income totaled $20.5 million for the year ended December 31, 2008 compared to $36.9 million for the year ended December 31, 2007. The $16.4 million decrease was primarily driven by a decrease in average interest-earning assets in Europe after we completed the sale of significant interests in 39 loans to a third-party institutional buyer in April 2008.

Noninterest income was a negative $391.6 million for the year ended December 31, 2008 compared to a positive $52.0 million for the year ended December 31, 2007. The $443.6 million decrease was primarily due to an increase in net losses, losses on equity in income of joint ventures and partnerships, and a decrease in fee income. Net losses totaled $407.5 million for the year ended December 31, 2008 compared to net losses of $46.8 million in 2007. The current year losses were primarily due to losses on significant interests in 39 loans that were sold in April 2008 to a third-party institutional buyer for a total aggregate sale price of approximately $1.8 billion. Equity in income of joint ventures and partnerships decreased $57.6 million due to operating losses incurred by the underlying investments in 2008 and profits recognized on the disposal of assets in 2007. There were no other asset disposals and therefore no related profits or losses recognized in 2008. Placement fees decreased $13.8 million due to a reduction in origination volume. Mortgage servicing fees decreased by $2.8 million primarily as a result of non-recurring income earned on the resolution of a specially serviced CMBS investment in 2007.

Noninterest expense totaled $34.7 million for the year ended December 31, 2008 compared to $53.8 million for the year ended December 31, 2007. The $19.1 million decrease was primarily due to a $13.9 million decline in compensation and benefits related to the decline in operating results and staff

reductions and a decrease of $2.4 million in professional fees due primarily to a lower volume of transactions.

Income before income taxes totaled $35.5 million for the year ended December 31, 2007 compared to a loss before income taxes of $23.2 million for the year ended December 31, 2006. The $58.7 million increase was driven primarily by higher net interest income and a lower provision for loan losses, combined with lower noninterest expense due to lower compensation and benefits, partly offset by a higher adjustment on our mortgage loans held for sale.

Net interest income totaled $36.9 million for the year ended December 31, 2007 compared to $27.6 million for the year ended December 31, 2006. The $9.3 million increase was primarily driven by a write-off of accrued interest income in the first quarter of 2006 relating to a loan to a joint venture that invested in non-performing loans in Germany. The remainder of the increase was due to an increase in the balance of interest-earning assets in 2007 compared to 2006.

Noninterest income totaled $52.0 million for the year ended December 31, 2007 compared to $64.6 million for the year ended December 31, 2006. The $12.6 million decrease was primarily due to a reduction in net gains and other income partially offset by increased equity in income of joint ventures and partnerships and increased mortgage servicing fees. Net gains decreased $55.0 million primarily due to valuation adjustments recorded during the year ended December 31, 2007 on our mortgage loans held for sale. Consulting fees, placement fees, and other fee income decreased $8.4 million primarily due to the sale of our French technology subsidiary in the fourth quarter of 2006. Equity in income of joint ventures and partnerships increased $42.1 million, primarily due to the sale of two United Kingdom real estate equity investments in the second quarter of 2007, combined with losses incurred in 2006 from a joint venture that invested in non-performing loans in Germany. Mortgage servicing fees increased $11.5 million as a result of fee income earned on the resolution of a CMBS investment that we service and an increase in the outstanding principal balance of our European Servicing portfolio from $36.8 billion as of December 31, 2006 to $59.4 billion as of December 31, 2007, due to additional third party servicing contracts.

The provision for loan losses improved $47.0 million for the year ended December 31, 2007 compared to the year ended December 31, 2006. The favorable variance was driven by a specific loan loss provision in 2006 relating to a single loan to a joint venture that invested in non-performing loans in Germany.

Noninterest expense totaled $53.8 million for the year ended December 31, 2007 compared to $67.5 million for the year ended December 31, 2006. The $13.7 million decrease was primarily due to lower compensation and benefits expense, decreased operating costs due to the sale of our French technology subsidiary, and a reduction in the recognition of deferred costs associated with new loan originations.

The following table summarizes the results of operations of our North American Affordable Housing segment for the periods indicated (in thousands):

		Year ended December 31,

		2008			2007			2006
Net interest income		$	2,378		$	(5,423	)	$	7,213
Noninterest income			(34,523	)		51,392			(185,680	)

	Total revenue		(32,145	)		45,969			(178,467	)
Provision for loan losses			—			(2,416	)		15,503

	Net revenue		(32,145	)		48,385			(193,970	)
Noninterest expense			34,444			45,981			78,146

(Loss) income before minority interest and income taxes			(66,589	)		2,404			(272,116	)
Minority interest income			—			—			—

(Loss) income before income taxes		$	(66,589	)	$	2,404		$	(272,116	)

Our North American Affordable Housing segment incurred a loss before income taxes of $66.6 million for the year ended December 31, 2008 compared to income before income taxes of $2.4 million for the year ended December 31, 2007. The $69.0 million decrease was primarily attributable to a decrease in noninterest income partially offset by a decrease in noninterest expense.

Net interest income totaled $2.4 million for the year ended December 31, 2008 compared to a negative $5.4 million for the year ended December 31, 2007. The increase of $7.8 million was primarily attributable to a decrease in variable rate funding costs associated with our fixed rate investment securities, lower outstanding balances of equity advances, and a change in the composition of our investment securities portfolio subsequent to the sale of a majority of our affordable housing debt platform in February 2007.

Noninterest income was a negative $34.5 million for the year ended December 31, 2008 compared to a positive $51.4 million for the year ended December 31, 2007. The decrease of $85.9 million was primarily attributable to a gain of approximately $71.5 million on the sale of a majority of our affordable housing debt platform in February 2007 (partially offset in our consolidated statement of operations by the impact of push down accounting which is reflected in "Corporate and other") and other year-over-year reductions in net gains of $68.0 million due to $31.6 million of impairments on equity investments for the year ended December 31, 2008 and $36.4 million of impairment charges on those investment securities classified as available for sale that were previously in an unrealized loss position as of December 31, 2008 where we determined that we may no longer have the ability to hold these investment securities for a period of time sufficient to allow for recovery in fair value. A portion of the increase in impairments on equity investments in 2008 was due to our expected inability to use certain tax credits before their expiration. These unfavorable variances were partially offset by a $29.0 million reduction in LIHTC loss reserves due to the repeal of legislation in the third quarter of 2008 that previously required such reserves, a $13.6 million reduction in losses related to other LIHTC yield guarantees, a $5.2 million reduction in losses on equity investments and a $4.5 million increase in asset management fees for the year ended December 31, 2008.

There is no current provision for loan losses compared to a negative $2.4 million for the year ended December 31, 2007. The $2.4 million credit for the year ended December 31, 2007 reflects the repayment of a $4.0 million pre-development loan that was originally reserved for in the year ended

December 31, 2006, partially offset by a $1.6 million provision related to a property acquired through foreclosure.

Noninterest expense totaled $34.4 million for the year ended December 31, 2008 compared to $46.0 million for the year ended December 31, 2007. The $11.6 million decrease was driven primarily by a reduction in compensation and benefits due to staff reductions and an overall reduction in operating expenses due to the sale of a majority of our affordable housing debt platform in February 2007.

Income before income taxes totaled $2.4 million for the year ended December 31, 2007 compared to a loss before income taxes of $272.1 million for the year ended December 31, 2006. The $274.5 million improvement was driven by a significant increase in noninterest income combined with a decrease in the provision for loan losses and a reduction in noninterest expense.

The segment recorded negative net interest income of $5.4 million for the year ended December 31, 2007 compared to positive net interest income of $7.2 million for the year ended December 31, 2006. The $12.6 million reduction resulted primarily from increased funding costs associated with carrying an inventory of equity investments in our LIHTC business, as well as a decrease in net interest income due to the sale of a majority of the affordable housing debt platform earlier in the year. In February 2007, approximately $1.0 billion of investment securities and mortgage loans held for sale were sold to an unaffiliated buyer and the buyer assumed approximately $0.7 billion in related financing in connection with the transaction.

Noninterest income totaled $51.4 million for the year ended December 31, 2007 compared to negative noninterest income of $185.7 million for the year ended December 31, 2006. The $237.1 million improvement was attributable to a gain on the sale of a majority of the affordable housing debt platform of approximately $71.5 million (excluding the impact of push down accounting reflected in "Corporate and other"), a $152.7 million reduction in losses relating to LIHTC yield guarantees and a real estate impairment of $24.5 million recorded in 2006. These positive variances were partially offset by the loss of revenue resulting from the sale of a majority of the affordable housing debt platform.

The provision for loan losses improved $17.9 million for the year ended December 31, 2007 compared to the year ended December 31, 2006. The favorable variance was primarily driven by the repayment of a $4.0 million pre-development loan that was originally reserved for during the year ended December 31, 2006.

Noninterest expense totaled $46.0 million for the year ended December 31, 2007 compared to $78.1 million for the year ended December 31, 2006. The $32.1 million decrease was driven primarily by a $23.3 million reduction in compensation and benefits due to staff reductions, and an overall reduction in operating expenses due to the sale of a majority of the affordable housing debt platform in February 2007.

The preparation of our consolidated financial statements in accordance with GAAP requires our management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of income and expense. Our management regularly evaluates these estimates, judgments and assumptions based on available information and experience. Because the use of estimates, judgments and assumptions is inherent in the financial reporting process, actual results may differ from these estimates under different assumptions or conditions. Certain of our accounting policies require higher degrees of

judgment and are more complex than others in their application. The discussion below addresses our most critical accounting estimates that we believe are most important to the presentation of our financial condition and results of operations. Our significant accounting policies are disclosed in Note 3 to our consolidated financial statements.

Many of our critical accounting estimates depend upon estimates of fair value. Note 3 to our consolidated financial statements contains a description of the valuation methodologies that we use for financial instruments measured at fair value on a recurring basis, including those accounted for at fair value prior to the adoption of SFAS No. 157, "Fair Value Measurements," or "SFAS No. 157," and SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115," or "SFAS No. 159," as well as the general classification of such instruments pursuant to the valuation hierarchy. The following paragraphs discuss our adoption of SFAS No. 157 and SFAS No. 159 and how these statements impact our estimates of fair value.

SFAS No. 157 defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. The adoption of SFAS No. 157 is discussed in Notes 3 and 18 to our consolidated financial statements. The adoption of this statement did not have a material impact as to the manner in which we determine fair value but does require additional disclosures as discussed in Note 18 to our consolidated financial statements.

SFAS No. 159 permits us to irrevocably elect fair value of the initial and subsequent measurement of certain financial assets and financial liabilities on an instrument-by-instrument basis. Subsequent changes in the fair value of these instruments are recognized in earnings when they occur. SFAS No. 159 required that the difference between the carrying value of financial assets and financial liabilities elected and the fair value of such instruments be recorded as an adjustment to beginning retained earnings in the period of adoption. Effective January 1, 2008, we elected fair value accounting for certain loan assets and deposit liabilities not previously accounted for at fair value. The after-tax cumulative effect from electing the fair value option for the selected financial instruments decreased retained earnings by $9.8 million on January 1, 2008.

In accordance with SFAS No. 157, we categorize our financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy as described above. For assets and liabilities where there exists limited or no observable market data, fair value measurements are based primarily upon management's own estimates, and are calculated based upon our pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other factors. The degree to which management's judgment is necessary in determining the fair value for assets and liabilities is directly dependent upon the availability of quoted prices in active markets. For financial instruments that have quoted market prices and actively trade, there is minimal subjectivity in determining fair value. Market conditions often affect the availability of observable fair value inputs. As observable market prices become unavailable or trading activity diminishes, there is a greater need for the use of valuation techniques requiring management judgment to estimate fair value.

Recent world events have resulted in illiquid markets for many of our financial instruments, requiring us to place more reliance on management's own estimates. Continuing the trend that began in mid-2007, 2008 was characterized by continued price volatility and constrained liquidity in the capital

markets. During 2008, a series of unprecedented events occurred which resulted in increased market illiquidity and downward pressure on asset pricing across various sectors. These events intensified with the bankruptcy filing of Lehman Brothers Holdings Inc., the federal government conservatorship of Fannie Mae and Freddie Mac, JPMorgan Chase & Co.'s acquisition of The Bear Stearns Companies, Inc., JPMorgan Chase & Co.'s acquisition of Washington Mutual Bank, the federal government's significant investment in American International Group, Inc., Bank of America Corp.'s acquisition of Merrill Lynch & Co. Inc., and Wells Fargo & Co.'s acquisition of Wachovia Corp.. Further pressure on pricing resulted from investor repositioning into cash or highly-liquid U.S. Government securities as mutual fund managers were faced with unprecedented withdrawal requests and issuers of commercial paper encountered an inability to roll over maturities. Transactional activity in all but the most liquid markets ceased over investor fears of further insolvencies.

Commercial mortgage loans are highly individualized. Under normal market conditions, transactions occur directly between parties or through seller-sponsored securitization vehicles. GSEs such as Fannie Mae and Freddie Mac also facilitate a market for securitization of individual loans as well as groups of loans. We have historically used pricing for both direct sale transactions and securitizations (through both seller-sponsored and government-sponsored securitization vehicles) when making fair value determinations. However, current market turmoil has contributed to a significant decline in activity. Securitization market activity and direct sales activity have effectively ceased due to continued turmoil in the capital markets. GSEs continue to provide a market for the sale of loans although activity is limited.

As a result of the substantial reduction in sales, syndication and securitization activity in 2008, we observed limited activity and received limited bids for specific loans that could be used in our valuation of our portfolio of loans held for sale. However, we did incorporate market information related to new loan originations which reflects spreads at which our loan portfolio could be refinanced. Considering their importance to the value of loans, these spreads were used as the basis for creating a pricing matrix for a portion of our portfolio. In addition, during the fourth quarter of 2008, we obtained appraisals for the collateral underlying approximately 30% of our loans held for sale. The appraisals obtained were the basis for updating the loan-to-value ratios for the loan portfolio which were used to establish the appropriate discount spread used to price the loan portfolio. Consistent with prior quarters, any loan held for sale that was specifically identified as impaired was valued using the net realizable value of the collateral, as the evaluation of impaired loans by potential buyers would be based to a large extent on the underlying real estate.

The availability of quoted prices for our U.S. Treasury investment securities were unaffected by the market turmoil due to their desirability as high-quality, highly liquid investments. As described above, market inputs for less liquid investment securities became increasing unreliable throughout the second half of 2008 due to the financial markets participants' desire for only the highest quality investments. Where we obtained inputs from third-party pricing providers to assist us in determining the fair value of investment securities, we evaluated these inputs and considered whether the resulting fair value estimates were appropriately placed in the fair value hierarchy. The majority of our investment securities portfolio is classified within Level 3 of the valuation hierarchy. For these securities, cash flows were analyzed and adjusted for anticipated credit losses. The resulting projected cash flows were then discounted at a rate we believe market participants would use given current market conditions. During the third and fourth quarters of 2008, we increased the discount rates used in our pricing models to account for the lack of liquidity in the market.

As of December 31, 2008, approximately $6.4 billion of our total assets consisted of financial instruments measured at fair value on a recurring basis, including financial instruments for which we elected the fair value option. Approximately $2.0 billion of these financial instruments, net of

counterparty and cash collateral balances, were measured using valuation methodologies involving market-based or market-derived information, collectively Level 1 and 2 inputs. Approximately $4.4 billion of these financial instruments were measured using model-based techniques, or Level 3 inputs, and represented approximately 69% of our total assets measured at fair value and approximately 21% of our total consolidated assets.

While increased market volatility and illiquidity was evident in 2008, the fair value methodology related to our Brokered CDs remained unchanged. There is no impact on the value of our Brokered CDs due to credit risk because the deposits are insured by the FDIC. Also, while the dislocation of market liquidity is evident in the marketplace, the yield curve used to discount the future cash flows related to the deposits reflects current market conditions. For these reasons, we continue to classify our Brokered CDs as Level 2 financial instruments because the yield curve is considered a reliable observable input.

Given the prevalence of fair value measurement in our financial statements, the control functions related to the valuation process are a critical component of our business operations. We employ control processes to validate the fair value of our financial instruments, including those derived from pricing models. These control processes are designed to ensure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, we review the valuation approach utilized to assure it is appropriate and consistently applied and that the assumptions are reasonable. Our reviews of the pricing models' theoretical soundness and appropriateness are performed by Company personnel with relevant expertise who are independent from the persons responsible for the lending and investment functions. The heads of our credit, market risk management and accounting departments are responsible for the oversight and valuation control processes and policies and for reporting the results of these processes and policies to our Audit Committee.

When market conditions permit, we periodically enter into transactions in which we sell financial assets, principally commercial mortgage loans. Upon a transfer of financial assets, we sometimes retain or acquire subordinated interests in the related assets. In addition, we generally retain servicing rights for all mortgage loans sold or securitized.

Gains and losses on such transactions are recognized using the guidance in SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125," or "SFAS No. 140," which is based on a financial components approach that focuses on control. Under this approach, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. SFAS No. 140 is a complex standard that often requires significant management analysis and judgment.

We determine the gain or loss on the sale of mortgage loans by allocating the carrying value of the underlying mortgage loans between securities or loans sold and the interests retained, including mortgage servicing rights, based on their fair values. The gain or loss on sale is the difference between the cash proceeds from the sale and the amount allocated to the securities or loans sold. Whether we record a gain or loss on sale depends, in part, on the carrying value of the financial assets involved in the transfer, allocated between the assets sold and the interests retained based on their fair values at the date of transfer. Due to recent market developments discussed in "—Outlook and Recent Trends,"

the volume and pricing of loan sales and securitizations decreased dramatically in 2008 and late 2007, resulting in realized losses in 2008 and 2007 compared to realized gains in prior periods. Realization of gains or losses on future sales is heavily dependent on the extent and timing of recovery of the markets for commercial mortgage products and changes in other market factors. See "Loans Held for Sale" in Note 3 to our consolidated financial statements. We recognized a pre-tax loss from the securitization of financial assets of $2.7 million and $1.0 million for the years ended December 31, 2008 and 2007, respectively.

The allowance for loan losses provides for the risk of losses inherent in our portfolio of loans held for investment. A portion of the allowance for loan losses is used to cover estimated losses on loans that have been specifically identified as being impaired.

We utilize a risk-rating process for measuring credit exposure that combines quantitative analysis and qualitative judgment in order to measure potential loan losses. We initially allocate a quantitative risk rating to a loan based on modeling, or other objective, fact-based credit criteria that consider key financial data, such as a loan's debt service coverage ratio, loan-to-value ratio and time to maturity, and collateral characteristics, such as a property's location, type and occupancy. We subsequently adjust our initial quantitative rating based on our assessment of qualitative factors, such as quality of sponsorship, financial reporting, quality and stability of cash flow, loan structure, loan documentation and the loan's performance relative to underwriting.

The estimates and assumptions we use in calculating our allowance for loan losses are based on a number of factors and considerations, which may include our experience and expectations concerning interest rates, credit spreads, rates of delinquencies and defaults on loans and loss recovery rates.

In accordance with SFAS No. 114, "Accounting by Creditors for Impairment of a Loan, an amendment of FASB Statements No. 5 and 15," or "SFAS No. 114," impaired loans typically consist of those loans for which it is probable we will not be able to collect all contractual principal and interest amounts due. An impaired loan is generally valued based on the estimated fair value of the underlying collateral and includes estimated costs of selling or realizing such collateral on a discounted basis. In addition to specific allowances for impaired loans, we also maintain allowances that are based upon a collective evaluation of the portfolio as a whole and we estimate such losses in accordance with SFAS No. 5. This analysis considers our past loan loss experience, the current credit composition of the total portfolio, historical credit migration, property type diversification, default and loss severity statistics, and other relevant factors.

The allowance for loan losses is increased as necessary by recording a charge to the provision for loan losses in the consolidated statement of operations. Amounts deemed to be uncollectible are charged against the allowance for loan losses. Amounts recovered on previously charged-off loans are added back to the allowance for loan losses. Uncertainties about the economies in our Company's primary market areas, including the United States, increase uncertainty about management's estimates of the allowance for loan losses. Increases in unemployment and/or low employment, decreases in corporate profits and adverse trends in other key economic indicators may correlate with increasing loan delinquencies and other factors affecting the timing and amounts we ultimately realize on our portfolio of loans held for investment. As of December 31, 2008 and 2007, our allowance for loan losses was $108.2 million and $28.8 million, respectively.

Income Recognition and Impairments Relating to Non-Performing Loans Acquired

We have acquired non-performing loans primarily in Asia, with a strategy of restructuring the loans or entering into workouts with borrowers, which may include foreclosure. We typically purchased these loans at a substantial discount to par, reflecting our determination that it was probable all amounts due

under the loans' governing instruments may not be collected. These loans are accounted for in accordance with AICPA Statement of Position 03-3, "Accounting for Certain Loans or Debt Securities Acquired in a Transfer," or "SOP 03-3." Under SOP 03-3, the excess of the estimated undiscounted principal, interest and other cash flows expected to be collected over the initial investment in the acquired asset is accreted into interest income over the expected life of the asset. These loans are classified as held for investment on our consolidated balance sheet.

We periodically perform detailed reviews of our portfolio of non-performing loans to determine whether there has been a change in expected cash flows. We update the estimated cash flows that are expected to be collected and evaluate whether the expected cash flows have changed, based upon the most recent information available. We determine the expected cash flows based on the current business plans relating to the assets. The business plans detail the current plan for disposal of the collateral, including estimates of the amounts and timing of future payments, foreclosures, and sales. These analyses also include anticipated costs to sell or other costs associated with resolving the debt.

We adjust the amount of accretion for any loans or pools of loans that we acquired when there is an increase or decrease in the expected cash flows. Further, we assess impairment on all loans or pools of loans for which there has been a decrease in expected cash flows in accordance with SOP 03-3 and SFAS No. 114. We measure impairment based on the present value of the expected cash flows from the loan discounted using the loan's effective interest rate or, in specific circumstances, through the estimated fair value of the underlying collateral minus the estimated costs of selling or realizing the underlying collateral. Impairment is recognized as a charge to our provision for loan losses in our consolidated statement of operations.

We curtailed purchases of non-performing loans starting in 2007, and have been disposing of some of our previously-acquired investments in such loans. As a result, our results of operations and financial condition are becoming less sensitive to changes in estimates of accretion and impairments on these loans than in prior periods. We exercise significant judgment in estimating the amount and timing of these expected cash flows. Differences between actual cash flows and estimated cash flows could have a material impact on our net income. The difference between the carrying value and the expected future cash flows, which we call accretable yield, was $24.2 million and $45.6 million as of December 31, 2008 and 2007, respectively.

We use derivative instruments in connection with our risk management and investment activities. Our primary objective in utilizing derivative instruments is to minimize market risk volatility associated with interest rate and foreign currency risks related to our assets and liabilities. Minimizing this volatility enables us to mitigate the impact of market risk on earnings. Additionally, we use interest rate swaps to more closely match interest rate characteristics of our interest-bearing liabilities with our interest-earning assets. We also utilize derivative instruments to mitigate foreign currency exposure related to foreign currency denominated transactions and our net investments in foreign operations. At times, we use derivative instruments in lieu of cash transactions for investment purposes.

The derivative instruments that we use include swaps, caps, forwards, options, swaptions, spread locks, loan commitments, credit derivatives and treasury-related derivative instruments. These instruments may be exchange-traded or contracted in the over-the-counter market.

In accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," or "SFAS No. 133," as amended and interpreted by, among other pronouncements, SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment of FASB Statement No. 133" and SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," or "SFAS No. 149," we record derivative instruments at estimated fair value on our consolidated balance sheet. Gains and losses resulting from changes in the fair value of such instruments are accounted for depending on whether or not they qualify for hedge accounting.

We formally document our risk management objective and strategy for undertaking various hedge transactions. For transactions that qualify for hedge accounting, this process includes linking the derivatives that are designated as fair value, cash flow, or foreign currency hedges to specific assets or pools of similar assets and specific liabilities in our consolidated balance sheet or to forecasted transactions.

We expect all of our designated hedging relationships to be highly effective in offsetting the designated risk during the hedge period. We also formally assess, both at inception and on an ongoing basis, whether the derivative instruments used in hedging transactions are highly effective in offsetting changes in estimated fair values or cash flows of the hedged items.

We discontinue hedge accounting prospectively when: (1) it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item (including firm commitments or forecasted transactions); (2) the derivative expires or is sold, terminated, or exercised; or (3) the derivative is no longer designated as a hedge instrument because: a) it is unlikely that a forecasted transaction will occur; b) a hedged firm commitment no longer meets the definition of a firm commitment; or c) management determines that designation of the derivative as a hedge instrument is no longer appropriate. When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair value hedge, the derivative will continue to be carried in the consolidated balance sheet at its fair value. The hedged asset or liability, if not normally carried at fair value, will no longer be adjusted for changes in fair value. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, the derivative will continue to be carried in the consolidated balance sheet at its fair value and any asset or liability that was recorded pursuant to recognition of the firm commitment will be removed from the consolidated balance sheet and recognized as a gain or loss in current period earnings. When hedge accounting is discontinued because it is no longer probable that a forecasted transaction will occur, the derivative will continue to be carried in the consolidated balance sheet at its fair value and gains and losses that were accumulated in accumulated other comprehensive income, net of tax, will be recognized immediately in current period earnings. In all situations in which hedge accounting is discontinued, the derivative will be carried at its fair value in the consolidated balance sheet with changes in its fair value recognized in current period earnings.

Classification, Valuation and Impairment of Investment Securities including Retained Interests in Securitized Assets

When we securitize loans in transactions accounted for as sales in accordance with SFAS No. 140, we may retain an interest in the assets sold. These retained interests may take the form of interest-only, investment grade, subordinate or unrated securities. The subordinate interests that we retain provide a form of credit enhancement for the more highly-rated securities.

In accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," the classification of investment securities is based on management's intent with respect to those securities. Investment securities classified as trading are carried at fair value with unrealized gains and losses recognized in current period earnings. Investment securities classified as available for sale are carried at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income, net of tax, which is a component of stockholders' equity. Realized gains and losses on the sale of investment securities are determined using the specific identification method and recognized in current period earnings. Interest income is recorded using the interest method which is reviewed and adjusted periodically based on changes in estimated cash flows.

We determine the estimated fair value of an investment security by reference to a published external source, where available. External quotes are not available for a portion of these assets because

of their relative lack of liquidity in the market. In these circumstances, we base valuations on internally-developed models that discount the expected cash flows of the security over the anticipated life of the security using an estimated yield adjusted for the risks associated with the investment. Our estimate of the fair value of these securities requires us to exercise significant judgment about the timing and amount of expected cash flows from these assets. In estimating the cash flows and post-loss yield for an investment, we consider various factors including estimated loan losses and defaults, prepayments, current yield curves, dealer quotations, if available, and estimated market yields for similar instruments. Due to the lack of transparency regarding inputs to the valuation, these investment securities are classified within Level 3 of the valuation hierarchy.

Investment securities classified as available for sale are periodically reviewed for potential impairment in accordance with Emerging Issues Task Force ("EITF") 99-20, "Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets," and FASB Staff Position ("FSP") No. EITF 99-20-1, "Amendments to the Impairment Guidance of EITF Issue No. 99-20," or "FSP EITF 99-20-1," or EITF 03-1, "The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments," and FSP FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments," or "FSP FAS 115-1 and FAS 124-1," depending on the nature of the security. Impairment is measured using a systematic methodology intended to consider all available evidence. If the carrying value of an investment security exceeds its estimated fair value, we evaluate, among other factors, the magnitude and duration of the decline in estimated fair value, the performance of the underlying assets, and our intent and ability to hold the asset until its value recovers. Once a decline in estimated fair value is determined to be other-than-temporary, an impairment charge is recorded in our consolidated statement of operations and a new cost basis is established. Significant judgment is involved in some cases to determine whether an other-than-temporary impairment has occurred.

The recent market developments that have affected loan valuations, as discussed above in "—Outlook and Recent Trends" and above, similarly affect valuations of investment securities collateralized by mortgage loans.

Changes in model assumptions can have a significant impact on the estimated fair value of retained interests in securitized assets. Note 16 to our consolidated financial statements included under Item 8 of this Annual Report on Form 10-K, summarizes the impact on the fair value of retained interests in securitized assets as of December 31, 2008 and 2007 due to a change in key assumptions. A 10% change in the assumed discount rate could have adversely affected the estimated fair value of our retained interests in taxable investment securities by approximately $2.8 million and $4.4 million as of December 31, 2008 and 2007, respectively. A 20% change could have adversely affected the estimated fair value by approximately $5.2 million and $7.2 million as of December 31, 2008 and 2007, respectively.

In accordance with SFAS No. 140 as amended by SFAS No. 156, "Accounting for Servicing of Financial Assets," we capitalize originated mortgage servicing rights based upon their fair value when the related loans are sold. We record purchased mortgage servicing rights at their cost at the time of acquisition, which approximates the fair value of such assets. Subsequent to origination or acquisition, we carry our mortgage servicing rights at the lower of amortized cost or fair value. We record amortization expense for each stratum in proportion to, and over the period of, the projected net servicing cash flows.

We determine the fair value of our mortgage servicing rights based upon market transactions for comparable servicing assets or, in the absence of representative market information, based upon other available market evidence and modeled market expectations of the present value of future estimated net cash flows that market participants would expect to be derived from servicing. Because benchmark market transaction data and quoted market prices are generally not available, we estimate the fair value of mortgage servicing rights through a discounted cash flow analysis and evaluation of current market information. We derive cash flows based upon internal operating assumptions that we believe would be used by market participants, such as prepayment rates, defaults, interest rates, required yields, discount rates, costs to service and other assumptions. We consider all available information and exercise significant judgment in estimating and assuming values for key variables in the modeling and discounting process.

We evaluate mortgage servicing rights for impairment by stratifying our portfolio according to predominant risk characteristics, primarily investor and loan type (e.g., CMBS, agency—Fannie Mae's DUS™ program, agency—non- Fannie Mae's DUS™ program and other). To the extent that the carrying value of an individual stratum exceeds its estimated fair value, we consider the mortgage servicing right asset to be impaired. We recognize impairment that is considered to be temporary through the establishment of a valuation allowance, with a corresponding charge to earnings in the period that the impairment is determined to have occurred. If the impairment is determined to be other-than-temporary, the valuation allowance is reduced along with the carrying value of the mortgage servicing right.

We recognize gains and losses on sales of mortgage servicing rights when the related sales contracts have been executed and legal title and substantially all risks and rewards of ownership of the servicing rights have passed to the buyer. We determine gains and losses to be the difference between the net sales proceeds we receive and the carrying value of the servicing rights sold less our costs to sell the servicing rights.

As of December 31, 2008, we had not recognized any valuation adjustments on our four principal strata of net mortgage servicing rights. Generally, valuations of servicing rights for commercial mortgages are less sensitive to change than valuations of servicing rights for residential mortgages, due to lower levels of prepayments and other factors. Declines in values are most likely to occur in circumstances when both interest rates are declining and commercial real estate credit markets are competitive, or when defaults on underlying loans increase. In the current economic environment, availability of credit has declined thereby slowing prepayments, but there is increasing uncertainty about borrower performance. See "—Allowance for Loan Losses" above.

Changes in model assumptions can have a significant impact on the fair value of mortgage servicing rights. Note 16 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K summarizes the impact on the fair value of our retained interests in mortgage servicing rights as of December 31, 2008 and 2007 due to a change in key assumptions. A 10% change in the assumed discount rate could have adversely affected the fair value of our retained interests in mortgage servicing rights by approximately $2.1 million and $3.3 million as of December 31, 2008 and 2007, respectively. A 20% change could have adversely affected the fair value by approximately $4.1 million and $6.5 million as of December 31 2008 and 2007, respectively.

We have syndicated limited partnership interests in affordable housing partnerships. These investments are in the form of limited partner ownership interests that are pooled into funds ("upper-tier funds"). These funds hold limited partner ownership interests in various operating partnerships that develop, own, and operate affordable housing properties throughout the United

States. In certain upper-tier funds, we have guaranteed a specified rate of return to the investors. Returns to investors in the partnerships are principally derived from flow-through low-income housing tax credits and tax losses generated by underlying operating partnership entities ("lower-tier partnerships").

Syndicated affordable housing partnerships that contain a guarantee are reflected in our consolidated financial statements under the financing method in accordance with SFAS No. 66, "Accounting for Sales of Real Estate," or "SFAS No. 66." More specifically, cash, cash equivalents, restricted cash and equity investments (in the lower-tier partnerships) of the guaranteed upper-tier funds are included in our consolidated balance sheet. Liabilities of the guaranteed syndicated real estate partnerships consist primarily of a financing liability, initially equal to the amount of equity contributed by each investor, payable to each tax credit fund investor. The financing liability, included as a component of real estate syndication proceeds and related liabilities in the consolidated balance sheet, is extinguished over the life of the guaranteed upper-tier funds as annual tax benefits guaranteed to each investor are delivered.

Returns to investors in the upper-tier funds are principally derived from flow-through low-income housing tax credits and tax losses generated by lower-tier partnerships. We are exposed to losses based on our limited partnership interests and on our guarantee to investors in certain upper-tier funds for a specific guaranteed rate of return. The loss exposure represents the potential under-delivery of income tax benefits by the upper-tier funds to the investors. In the event of a shortfall in the delivery of tax benefits to the investors, we are required to make cash payments to the investors of the upper-tier funds.

We initially quantify the costs associated with maintaining our yield guarantees, and then subsequently evaluate those costs on a quarterly basis, in order to ensure that the recorded liability for each guaranteed tax credit fund is sufficient to cover repayment of principal plus the guaranteed yield to the investors. When we identify a deficiency in that liability, the liability is increased to cover the shortfall associated with that tax credit fund. The loss contingency policy is governed by SFAS No. 5, which requires establishment of a liability for losses when it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The SFAS No. 5 liability is reduced as payments are made to settle it. When we applied push down accounting on March 23, 2006 as a result of the Sponsor Transactions, we recorded an estimate of the fair value of the guarantees, which was in excess of the liability determined under SFAS No. 5. We amortize that excess using a systematic and rational method, which approximates straight-line over the period of delivery of the tax benefits to investors, except that amortization of the liability for a particular fund may be accelerated when certain events occur and result in partial settlement of the guarantee, such as the sale of a lower-tier partnership and related settlement with the guaranteed investors.

The estimates and assumptions we use in determining our cost estimates for providing guaranteed yields on guaranteed LIHTC funds are based upon a number of factors and considerations. These may include operating experience and expectations of projected funding requirements for lower-tier partnerships for negative cash flow, deferred maintenance costs, shortfalls in the permanent loan financing amount as compared to the outstanding construction loan balance or other areas where the lower-tier partnerships require funds to enable them to deliver the tax benefits to the upper-tier partnerships.

Significant judgment is involved to estimate the guarantee liability as of any financial reporting date. That judgment is made more difficult by the fact that there is a remaining period of approximately 11 to 16 years during which the guarantees are in effect, and it is difficult to estimate the amount of guarantee payments (or other payments to support the performance of the funds) that will be necessary over such a lengthy period. Therefore, the estimate is inherently imprecise.

The estimate of the fair value of the aforementioned guarantee liability recorded in push down accounting, and periodic estimates of SFAS No. 5 liabilities described above, involve significant estimates with varying degrees of uncertainty. Amounts ultimately realized as income by us as the liability for real estate syndication proceeds and related liabilities is reduced are uncertain as to timing, and the total amount realized over time depends on the operating performance of the lower-tier partnerships and the ability of the upper-tier funds to deliver tax credits and, in some cases, guaranteed yields, to investors. We have not originated any new lower-tier partnerships since 2005, and the remaining expected lives of the upper-tier partnerships vary from one to 14 years.

As of December 31, 2008, the estimated liability for the LIHTC fund guarantees, which included a deferred income component, was $318.6 million. Our future operating results may be significantly affected by the differences between actual expenditures related to the guarantees over time and the amount we have currently estimated and accrued. As of December 31, 2008, our maximum exposure to loss under the yield guarantees was $1.6 billion.

As described above under "—Understanding Our Financial Results—Income Taxes," upon the closing of the Sponsor Transactions, we became deconsolidated from the GM-controlled tax group and are now liable for worldwide taxes based solely on our consolidated operations as a standalone taxpayer.

We account for income taxes under the asset and liability method in accordance with SFAS No. 109. We determine deferred tax assets and liabilities based on temporary differences between the tax basis of our assets and liabilities and their reported amounts in our consolidated financial statements, and the amounts of operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the periods in which we expect the deferred tax asset or liability to be realized or settled. We recognize the effect on our deferred tax assets and liabilities of a change in tax rates in earnings in the period that includes the enactment date. We provide a valuation allowance against our deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

On January 1, 2007, we adopted FIN 48, which clarifies SFAS No. 109 by defining the confidence level that an income tax position must meet in order to be recognized in the financial statements. FIN 48 requires that the tax effects of a position be recognized only if it is "more-likely-than-not" to be sustained solely on its technical merits. The "more-likely-than-not" threshold represents a positive assertion by management that a company is entitled to the economic benefits of a tax position. If a tax position is not considered "more-likely-than-not" to be sustained based solely on its technical merits, no benefits of the tax position are to be recognized. The determination of whether a tax position is "more likely than not" to be sustained can involve a considerable amount of judgment by management.

As a result of adopting FIN 48, management reviewed the income tax positions it has recorded in the application of push down accounting and has evaluated the impact of Emerging Issues Task Force Issue No. 93-7, "Uncertainties Related to Income Taxes in a Purchase Business Combination," or "EITF 93-7," as it relates to income tax exposures related to periods prior to the Sponsor Transactions. Under the guidance of EITF 93-7, we recorded the impact of adopting FIN 48 on our predecessor period tax liabilities as an increase to goodwill in the consolidated balance sheet. For our successor period tax liabilities, we recorded the impact of adopting FIN 48 as a cumulative effect adjustment to retained earnings in the consolidated balance sheet. Adjustments to tax liabilities subsequent to the adoption of FIN 48 (e.g., through actual or effective settlement) are recorded through income tax expense or through additional adjustments to goodwill depending on whether the liabilities arose from transactions prior to or after the Sponsor Transactions. We classify interest and penalties related to

unrecognized tax benefits as income tax expense. See Note 15 to our consolidated financial statements for the impact of adopting FIN 48 on our consolidated financial statements.

We establish valuation allowances for our deferred tax assets based on a "more-likely-than-not" threshold. Our ability to realize our deferred tax assets depends on our ability to generate sufficient taxable income within the carryback or carryforward periods provided for by law within each applicable tax jurisdiction. We evaluate all positive and negative evidence, including scheduled reversals of existing deferred tax liabilities, projected future taxable income and tax planning strategies. We also consider the nature, frequency and severity of recent losses and the duration of statutory carryforward periods. In making such judgments, significant weight is given to evidence that can be objectively verified. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence that is objective and verifiable, such as cumulative losses in recent years.

If we generate future taxable income in jurisdictions where we have recorded full valuation allowances, on a sustained basis, our conclusion regarding the need for full valuation allowances in these tax jurisdictions could change, resulting in the reversal of some or all of the valuation allowances. If our operations generate taxable income prior to reaching profitability on a sustained basis, we would reverse a portion of the valuation allowance related to the corresponding realized tax benefit for that period, without changing our conclusions on the need for a full valuation allowance against the remaining net deferred tax assets.

The valuation of deferred tax assets requires significant judgment. Our accounting for deferred tax consequences of events that have been recognized in our financial statements and our future taxable income represent our best estimate of those future events.

In April 2007, the FASB issued FASB Staff Position ("FSP") No. FIN 39-1, "Amendment of FASB Interpretation No. 39," or "FSP FIN 39-1." FSP FIN 39-1 modifies FIN No. 39, "Offsetting of Amounts Related to Certain Contracts," and permits companies to offset cash collateral receivables or payables with net derivative positions under certain circumstances. FSP FIN 39-1 was effective for the Company on January 1, 2008. The adoption of FSP FIN 39-1 did not have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations," or "SFAS No. 141R," which is intended to improve reporting by creating greater consistency in the accounting and financial reporting of business combinations, resulting in more complete, comparable, and relevant information for investors and other users of financial statements. To achieve this goal, the new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. Prior to the adoption of SFAS No. 141R, any adjustments to the FIN No. 48 reserve are recorded as an increase to goodwill if an expense and, if a benefit, are applied (a) first to reduce to zero any goodwill related to the acquisition, (b) second to reduce to zero other noncurrent intangible assets related to the acquisition, and (c) third to reduce income tax expense. Subsequent to the adoption of SFAS No. 141R, the above rule will no longer apply and any expense or benefit associated with realizing (or re-measuring) unrecognized tax benefits will be recorded as part of income tax expense. SFAS No. 141R shall be applied prospectively by us to business combinations for which the acquisition date is on or after January 1, 2009. Early adoption is not permitted. Management is currently evaluating the impact of SFAS No. 141R on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51," or "SFAS No. 160," which is intended to improve the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report noncontrolling (minority) interests in subsidiaries as equity (as opposed to as a liability or mezzanine equity) in the consolidated financial statements. In addition, SFAS No. 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transactions. SFAS No. 160 is effective for us on January 1, 2009. Management is currently evaluating the impact of SFAS No. 160 on our consolidated financial statements.

In February 2008, the FASB issued FSP No. FAS 157-2, "Effective Date of FASB Statement No. 157," or "FSP FAS 157-2." This FSP delays the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. FSP FAS 157-2 became effective upon issuance and was adopted by our Company.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133," or "SFAS No. 161." SFAS No. 161 changes disclosure requirements about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS No. 161 is effective for our Company on January 1, 2009. Management is currently evaluating the potential impact of SFAS No. 161 on the disclosures included in our consolidated financial statements.

In April 2008, the FASB issued FSP No. FAS 142-3, "Determination of the Useful Life of Intangible Assets," or "FSP FAS 142-3." This FSP amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of a recognized intangible asset under SFAS No. 142. The FSP affects entities with recognized intangible assets and is effective for our Company on January 1, 2009. This new guidance applies to (1) intangible assets that are acquired individually or with a group of other assets and (2) intangible assets acquired in business combinations and asset acquisitions. The adoption of FSP FAS 142-3 is not expected to have a material impact on our consolidated financial statements.

In June 2008, the FASB issued FSP No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities," or "FSP EITF 03-6-1." This FSP addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and therefore need to be included in the earnings allocation in calculating earnings per share under the two-class method described in SFAS No. 128, "Earnings per Share." This FSP requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. The FSP is effective for our Company on January 1, 2009. All prior-period earnings per share data presented shall be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform to the provisions of this FSP. Early application is not permitted. The adoption of FSP EITF 03-6-1 is not expected to have a material impact on our consolidated financial statements.

In September 2008, the FASB issued FSP No. FAS 133-1 and FIN 45-4, "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161." The FSP amends SFAS No. 133 to require certain disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FIN 45 to require additional

disclosures about the current status of the payment/performance risk of a guarantee. The FSP also clarifies that, as noted above, SFAS No. 161 is effective for our Company on January 1, 2009. The provisions of the FSP that amend SFAS No. 133 and FIN 45 were effective for our Company on December 31, 2008. The adoption of the FSP did not have a material impact on our consolidated financial statements.

In September 2008, the FASB issued EITF 08-05, "Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement," or "EITF 08-05." EITF 08-05 requires issuers of liability instruments with a third-party guarantee or other credit enhancement to exclude the effect of the credit enhancement when measuring the liability's fair value. The effect of initially applying the guidance in EITF 08-05 shall be included in the change in fair value in the period of adoption. EITF 08-05 is effective for our Company on January 1, 2009. Management is currently evaluating the potential impact of EITF 08-05 on our consolidated financial statements.

In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active," or "FSP FAS 157-3." FSP FAS 157-3 applies to financial assets within the scope of accounting pronouncements that require or permit fair value measurements in accordance with SFAS No. 157. The FSP clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. The FSP became effective upon issuance. We have considered this guidance in measuring the fair value of our assets and liabilities.

In November 2008, the FASB issued EITF 08-06, "Equity Method Investment Accounting Considerations," or "EITF 08-06." EITF 08-06 addresses the potential effect of SFAS No. 141R and SFAS No.160 on equity method accounting under Accounting Principles Board Opinion No. 18, "The Equity Method of Accounting for Investments in Common Stock," or "Opinion No. 18." EITF 08-06 will continue existing practices under Opinion No. 18 including the use of a cost accumulation approach to initial measurement of the investment. The EITF will not require the investor to perform a separate impairment test on the underlying assets of an equity method investment. However, an equity method investor is required to recognize its proportionate share of impairment charges recognized by the investee, adjusted for basis differences, if any, between the investee's carrying value for the impaired assets and the cost allocated to such assets by the investor. The investor is also required to perform an overall other-than-temporary impairment test of its investment in accordance with Opinion No. 18. EITF 08-06 is effective for our Company on January 1, 2009. Management is currently evaluating the potential impact of EITF 08-06 on our consolidated financial statements.

In December 2008, the FASB issued FSP FAS No.140-4 and FIN 46(R)-8, "Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities." The purpose of this FSP is to improve disclosures by public entities and enterprises until the pending amendments to SFAS No. 140 and FIN 46R are finalized and approved by the FASB. The FSP amends SFAS 140 to require public entities to provide additional disclosures about transferors' continuing involvement with transferred financial assets. It also amends FIN 46R to require public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. The FSP also requires disclosures by a public enterprise that is (a) a sponsor of a qualifying special-purpose entity ("SPE") that holds a variable interest in the qualifying SPE but was not the transferor of financial assets to the qualifying SPE and (b) a servicer of a qualifying SPE that holds a significant variable interest in the qualifying SPE but was not the transferor of financial assets to the qualifying SPE. The FSP increases disclosure requirements for public companies and is effective for reporting periods (interim and annual) that end after December 15, 2008. FSP FAS 140-4 and FIN 46(R)-8 was adopted by our Company upon

issuance. We have considered this guidance in preparing the disclosures included in our consolidated financial statements.

In January 2009, the FASB issued FSP EITF 99-20-1, "Amendments to the Impairment Guidance of EITF 99-20," or "FSP EITF 99-20-1." This FSP amends EITF 99-20 to align the guidance on other-than-temporary impairments for beneficial interests with the guidance in SFAS No. 115 and other related guidance. The FSP was effective for our Company on December 31, 2008. The adoption of FSP EITF 99-20-1 did not have a material impact on our consolidated financial statements.

In April 2009, the FASB issued FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly," or "FSP FAS 157-4," to provide additional guidance for estimating fair value in accordance with SFAS No. 157 when the volume and level of market activity for the asset and liability have significantly decreased. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009. Management is currently evaluating the impact of FSP FAS 157-4 on our Company's consolidated financial statements.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments," or "FSP FAS 115-2 and FAS 124-2." The FSP modified the requirement in existing accounting guidance to demonstrate the intent and ability to hold an investment security for a period of time sufficient to allow for any anticipated recovery in fair value. When the fair value of a debt or equity security has declined below the amortized cost at the measurement date, an entity that intends to sell a security or is more-likely-than-not to sell the security before the recovery of the security's cost basis must recognize the other-than-temporary impairment in earnings. For a debt security with a fair value below the amortized cost at the measurement date where it is more-likely-than-not that an entity will not sell the security before the recovery of its cost basis, but an entity does not expect to recover the entire cost basis of the security, the security is considered other-than-temporarily impaired. The related other-than-temporary impairment loss on the debt security will be recognized in earnings to the extent of the credit losses with the remaining impairment loss recognized in accumulated other comprehensive income. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual periods ending after June 15, 2009. Management is currently evaluating the impact of FSP FAS 115-2 and FAS 124-2 on our Company's consolidated financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments," or "FSP FAS 107-1 and APB 28-1". The FSP amends SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," or "SFAS No. 107," to require an entity to provide disclosures about fair value of financial instruments in interim financial statements. FSP FAS 107-1 and APB 28-1 is effective for interim and annual periods ending after June 15, 2009. Management is currently evaluating the impact of FSP FAS 107-1 and APB 28-1 on our Company's consolidated financial statements.

We require substantial amounts of capital to support our operations. Members of our senior management, in consultation with our board of directors, establish our overall liquidity and capital allocation strategies. A key objective of these strategies is to support the execution of our business strategy while maintaining sufficient ongoing liquidity throughout the business cycle to service our financial obligations as they become due.

When making funding and capital allocation determinations, members of our senior management consider business performance; the availability of, and the costs and benefits associated with, different funding sources; current and expected capital markets and general economic conditions; our balance sheet and capital structure; and our targeted liquidity profile and risks relating to our funding needs. In

carrying out these activities, members of our senior management monitor, evaluate and seek to control the impact that our business activities have on our balance sheet, liquidity and capital structure, thereby helping to ensure that our operations are aligned with our liquidity and capital allocation strategies. Although we manage our liquidity on a consolidated basis, we also review our liquidity sources and uses at Capmark Bank US and at non-Capmark Bank US entities separately in light of the different sources and needs for liquidity in these operations.

Our primary uses of liquidity are for (1) the origination and funding of loan commitments and real estate-related investments, (2) the repayment of short-term and long-term borrowings and related interest, and (3) the funding of our operating expenses. We require short-term liquidity to fund loans that we originate and hold on our consolidated balance sheet pending sale, including through syndication, participation or securitization. We generally require longer-term funding to finance the loans and real estate-related investments that we hold for investment. Due to the lack of short-term and longer-term funding currently available outside of Capmark Bank US and the significantly reduced opportunities for syndication, participation or securitization of loans, we have ceased originating new loans and acquiring real estate investments for our non-Capmark Bank US balance sheet at this time.

Our primary sources of liquidity have been (1) net cash from our operations, (2) proceeds from the repayment of loans, (3) proceeds from the issuance of short-term and long-term borrowings/deposits and (4) proceeds from the sale of loans. Our principal debt financing sources have been (1) committed unsecured funding provided by banks, including our senior credit facility and other bank loans; (2) secured funding facilities, including borrowings by Capmark Bank US from the Federal Reserve Bank ("FRB") of San Francisco and the Federal Home Loan Bank ("FHLB") of Seattle; and (3) other uncommitted funding sources, including Brokered CDs issued by Capmark Bank US.

The non-Capmark Bank US entities maintain their own liquidity and funding program focused on operating cash flow from their businesses. During 2008, we were severely limited in our ability to access new capital from outside parties or issue new unsecured short-term and long-term debt. As a result, the non-Capmark Bank US entities' current primary sources of liquidity are asset sales and loan repayments. We are currently in negotiations with the lenders under our bridge loan agreement and senior credit facility to complete a restructuring of these agreements. See "Business—Going Concern Considerations" in Part I, Item 1 of this Annual Report on Form 10-K.

Capmark Bank US maintains its own funding program to provide for its capital needs. Capmark Bank US relies on the issuance of Brokered CDs for unsecured financing. Capmark Bank US's ability to issue Brokered CDs is dependent upon Capmark Bank US remaining properly capitalized and maintaining appropriate ratings by its regulators. Capmark Bank US may have access to borrowings from the FHLB of Seattle and the FRB of San Francisco for secured financing. The Company, Capmark Bank US and Escrow Bank also entered into a capital maintenance agreement whereby the Company has agreed with the FDIC to maintain minimum levels of capital at Capmark Bank US and Escrow Bank. We have made capital contributions consisting of cash and loans to Capmark Bank US since its inception and additional capital contributions may be made in the future. Capmark Bank US has the ability to dividend cash to Capmark Financial Group Inc. to the extent of Capmark Bank US's cumulative earnings and subject to maintaining compliance with regulatory capital requirements. Since the inception of Capmark Bank US, this activity has been limited and is not expected to occur in the near future.

As of December 31, 2008, we had $874.4 million in total cash, of which $149.6 million was restricted under current regulatory and other contractual arrangements. This represented a net decrease in total cash of approximately $562.4 million from December 31, 2007. As of December 31, 2008, we had readily available cash and U.S. Treasury securities classified as trading (excluding restricted cash and cash held by Capmark Bank US) of approximately $1.7 billion. In January 2009, we sold $1.3 billion in U.S. Treasury securities classified as trading which increased our readily available cash.

During the year ended December 31, 2008, net cash provided by operating activities totaled $1.2 billion. The European loan sale in April 2008 generated approximately $1.8 billion in cash, the proceeds of which were primarily used to repay indebtedness.

We used net cash of $1.3 billion in investing activities for the year ended December 31, 2008, primarily for the origination of loans held for investment totaling $2.9 billion which was offset in part by the receipt of approximately $1.5 billion from the repayment of loans held for investment. For the year ended December 31, 2008, we used approximately $376.9 million of net cash in our financing activities, in large part due to a net decrease of $398.1 million in short-term borrowings.

In the fourth quarter of 2008, we continued to take actions to maintain liquidity to support our business operations such as focusing our efforts on originating loans for government-sponsored programs and third-parties of $2.0 billion in the fourth quarter and $8.3 billion for the year ended December 31, 2008. In addition, we have materially reduced our proprietary originations and, other than funding of previously committed loans, substantially all of our 2008 originations were funded by Capmark Bank US.

In December 2008, we applied to become a bank holding company and financial holding company and to participate in the CPP. In February 2009, we withdrew such applications. Our board of directors instructed management to withdraw the applications after evaluating the financial and other requirements for becoming a bank holding company communicated by the Federal Reserve Board's staff and our other current priorities. As a result of the withdrawal of our bank holding company application, Capmark Financial Group Inc. is not eligible to participate in the CPP, which is a program pursuant to which the Treasury injects capital into eligible financial institutions through the purchase of preferred stock and warrants to purchase preferred stock, or the TLGP, pursuant to which the FDIC guarantees senior debt of eligible financial institutions.

Capmark Bank US also applied to participate in the CPP and its application is still being processed by the FDIC. Participation by Capmark Bank US in the CPP is subject to, among other things, the discretion of the FDIC and the Treasury. We cannot provide assurance that Capmark Bank US's application will be approved or that it will be able to obtain any material benefits under the CPP. Capmark Bank US is also eligible to participate in the TLGP.

Our reliance on debt financing to fund a portion of our operations makes access to sources of short-term and long-term unsecured financing important. The cost and availability of unsecured debt financing generally are dependent on our short-term and long-term credit ratings. Factors that are significant to the determination of our credit ratings or that otherwise affect our ability to raise short-term and long-term financing include the level and volatility of our earnings, our relative competitive position, our risk management policies, our access to sources of liquidity, our capital adequacy, our level of leverage, the credit quality of our balance sheet, our ability to retain key personnel and legal, regulatory and tax developments. See "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks associated with a reduction in our credit ratings.

The following table presents the credit ratings and ratings outlook assigned to our senior unsecured indebtedness by Standard & Poors Ratings Service ("S&P"), Fitch Ratings ("Fitch") and Moody's Investors Service ("Moody's") as of the date of the filing of this Annual Report on Form 10-K. On October 8, 2008, Fitch downgraded our long-term rating to BBB- from BBB and revised our outlook to negative from stable. On October 15, 2008, Moody's affirmed our long-term rating of Baa3 and revised our outlook to negative from stable. On November 13, 2008 S&P affirmed

our long-term rating of BBB- and revised our outlook to negative from stable. On February 26, 2009, Fitch downgraded the Company's long-term rating to B- from BBB- and maintained a negative rating outlook. On February 26, 2009, Moody's downgraded the Company's long-term rating to Ba2 from Baa3 and placed the rating under review for further possible downgrade. On March 2, 2009 S&P downgraded the Company's long-term rating to B+ from BBB- and maintained a negative rating outlook. On April 7, 2009, Moody's downgraded the Company's long-term rating to B2 from Ba2 and kept the rating under review for further possible downgrade. Credit ratings are opinions of a rated entity's ability to meet its ongoing obligations. Credit ratings are not recommendations to buy, sell or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. Each agency's rating should be evaluated independently of any other agency's rating.

Based on the recent downgrades of our credit ratings as reflected in the above table, as of the date of this filing additional collateral was posted pursuant to agreements with certain counterparties of approximately $202.4 million. In addition, our interest expense under our senior credit facility, bridge loan and senior notes increased by $59.9 million, on an annualized basis, as a result of such downgrades.

The following table presents the ratings assigned to our servicing operations as of the date of the filing of this Annual Report on Form 10-K. The servicer ratings are an indication of a servicer's ability to effectively service CMBS and RMBS and are subject to revision or withdrawal at any time by the assigning rating agency. Each agency's rating should be evaluated independently of any other agency's rating.

Our CDO asset management operations as of the date of the filing of this Annual Report on Form 10-K had a rating of CAM2 from Fitch. Asset management ratings are an indication of an asset management organization's vulnerability to operational and investment management failures.

Liquidity in the capital markets has been constrained, limiting our access to the secured and unsecured debt markets. Our ability to access additional liquidity is subject to a number of factors, including our ability to restructure our senior credit facility and bridge loan agreement, financial performance, our liquidity, the general availability of and rates applicable to financing transactions, lenders' and investors' resources, our credit rating, and our industry and market trends.

Our ability to access the capital markets and other sources of secured and unsecured funding, which is critical to our ability to do business, has been and could continue to be adversely affected by recent events in the global markets and in the economy. As described in "—Outlook and Recent Trends," global market and economic conditions have been, and continue to be, disrupted and volatile

to an unprecedented extent. The availability of funding outside of Capmark Bank US has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Due to widespread concerns about the stability of the markets and the strength of counterparties, many lenders have reduced and, in some cases, ceased to provide funding to borrowers. Further or prolonged disruptions in the global markets and economy may further adversely affect our liquidity and access to the secured and unsecured debt markets. For additional information on factors that may affect our liquidity and financial condition, see "Our independent registered public accounting firm, Deloitte & Touche LLP, has concluded that substantial doubt exists about our ability to continue as a going concern as a result of our net losses and breach of financial covenants in certain of our borrowing arrangements," "Our liquidity and financial condition have been and could continue to be adversely affected by current market and economic conditions," "Our business is significantly affected by general business, economic and cyclical market conditions, particularly in the commercial real estate industry, and accordingly, our business has been and could continue to be harmed in the event of a prolonged economic slowdown or recession or a market downturn or disruption," "Developments in the debt capital markets have adversely affected and may continue to adversely affect our results of operations and financial condition" and "We require substantial amounts of capital to fund our operations. If we are unable to maintain adequate funding on acceptable terms, our results of operations and financial condition could suffer and we could face difficulty operating our business as planned" included in Item 1A of this Annual Report on Form 10-K.

Brokered CDs continue to provide a key liquidity source for Capmark Bank US. Although market conditions adversely affected the availability of other funding sources throughout 2008, Capmark Bank US was able to issue Brokered CDs to support growth in its loan portfolio as the Brokered CD market remained stable and provided consistently available funding. While we do not maintain specific target levels for Brokered CDs, we manage the level of Brokered CDs in response to Capmark Bank US's current and anticipated funding needs changes in depositor demand, prevailing pricing and alternative funding spreads and overall economic conditions. When issuing Brokered CDs, one of our goals is to achieve a liability maturity profile similar to that of our asset maturity profile. Based upon the increasing duration of our asset maturity profile, we have increased our issuance of Brokered CDs ranging in maturity from two to five years. We continue to monitor shorter-term maturities should the opportunity arise to issue shorter-term Brokered CDs for economic reasons.

General economic conditions may affect our ability to access the Brokered CD market. We face the risk that we may not be able to issue Brokered CDs or may need to issue them at higher rates. An increase in rates could have a negative impact on our net interest income. Capmark Bank US also has access to secured funding through FHLB Seattle and the FRB of San Francisco, which subject to the terms of the programs. We believe that these secured borrowing arrangements may provide alternative funding sources for a portion of Capmark Bank US's Brokered CD liabilities if we are either unable to access the Brokered CD market or the overall cost of obtaining funding in this market increases significantly. Capmark Bank US's trust department also accepts deposits of principal, interest, escrow and reserve balances that borrowers maintain in custodial accounts for the purpose of paying principal and interest on their loans and funding repairs, tenant improvements, taxes and insurance on the properties that are financed with their loans. Deposits held in a fiduciary capacity are not our assets or liabilities and, accordingly, are not included in the consolidated balance sheet. A portion of these deposits are eligible for investment as deposits at Capmark Bank US at the discretion of the trust department and may provide us with an alternative form of financing.

The following table presents information concerning the financing arrangements and other funding sources that we had in place as of December 31, 2008 (in thousands):

Financing Arrangements and Funding Sources				Amount Outstanding		Funding Limit(12)		Weighted Average Remaining Maturity

								(months)
Primary long-term funding:
	Senior credit facility
		Term loan(1)(3)		$	2,654,721	$	2,654,721		27
		Revolving credit facility(1)(2)(3)			2,692,409		2,698,492		27

			Total		5,347,130		5,353,213		27

	Bridge loan(3)				833,000		833,000		3
	Senior notes(4)				2,504,006		2,504,006		47

	Total primary long-term funding				8,684,136		8,690,219		30

Secured funding(5):
	Repurchase agreements(6)				47,472		60,155		—
	Other secured funding facilities—Capmark Bank US(7)				1,363,504		3,537,843		26
	Other secured funding facilities—Other(7)				478,273		478,273		8
	Bank and third-party funding				164,240		164,240		57

		Total secured funding			2,053,489		4,240,511		24

Unsecured funding:
	Other unsecured funding—uncommitted—Capmark Bank US(8)				—		370,000		—
	Other unsecured funding—uncommitted—Other				146,111		165,257		—
	Other bank and third party loans(7)				95,357		187,420		5

Total unsecured funding					241,468		722,677		2

Subtotal					10,979,093		13,653,407		29
	Brokered CDs(9)				5,690,930		5,690,930		19

	Total funding and bank deposit liabilities				16,670,023		19,344,337		25

Consolidated debt agreements(10):
	Secured debt attributable to the consolidation of securitizations				184,086		184,086		N/A
	Secured debt attributable to the consolidation of LIHTC partnerships				180,413		180,413		N/A

		Total consolidated debt agreements			364,499		364,499		N/A

Junior subordinated debentures(11)					250,001		250,001		447

Total borrowings and deposit liabilities				$	17,284,523	$	19,958,837		32

In addition to the outstanding funding reflected in the above table, as of December 31, 2008, we had $1.1 billion of stockholders' equity and $72.9 million of common stock classified as mezzanine equity. As of December 31, 2008, we held $874.4 million of total cash, including $290.8 million of cash held at Capmark Bank US.

Of the total deposit liabilities reflected in the above table, $5.7 billion consisted of FDIC insured Brokered CDs issued by Capmark Bank US, compared to $5.5 billion of Brokered CDs outstanding as of December 31, 2007. Capmark Bank US may also have access to funding in the form of escrow deposits held in trust as provided by our U.S. servicing operations. As of December 31, 2008, none of the eligible escrow funds held in trust by our U.S. servicing operations were placed on deposit with Capmark Bank US. As of December 31, 2008, the remaining amount of servicing deposits that were eligible for deposit at Capmark Bank US at the discretion of the trust department was $1.1 billion.

In connection with the Sponsor Transactions, on March 23, 2006, we and a number of our subsidiaries entered into our senior credit facility with a syndicate of lenders. Our senior credit facility is unsecured and consists of a $2.75 billion multi-currency revolving credit facility and a $2.75 billion multi-currency term loan facility. The revolving credit facility is divided into a U.S. sub-facility, a Canadian sub-facility, an Irish sub-facility and a Japanese sub-facility. The U.S. sub-facility only permits borrowings to be denominated in U.S. dollars. All other sub-facilities allow for borrowings that are denominated in Euros, British pounds sterling, Japanese yen or U.S. dollars and, in the case of the Canadian sub-facility, borrowings that are also denominated in Canadian dollars. In addition, the revolving credit facility includes borrowing capacity available for letters of credit and for borrowings on same day notice, which are commonly referred to as swing lines.

Principal amounts outstanding under both the revolving credit facility and the term loan facility are due and payable in full, at maturity, on March 23, 2011. In October 2008, we drew down substantially all of the remaining capacity under the revolving credit facility. Subject to compliance with the terms of the facility, we are permitted to borrow, repay and re-borrow amounts under the revolving credit facility from time to time. The term loan may be prepaid prior to maturity but may not be redrawn. As of December 31, 2008, we had $2.7 billion of indebtedness outstanding under the revolving credit facility and $2.7 billion of indebtedness outstanding under the term loan. These borrowings were used to refinance indebtedness owed to GMAC at the time of the Sponsor Transactions and to fund subsequent investments and operating activities.

Our senior credit facility contains financial, affirmative and negative covenants that we believe are usual and customary for similar senior credit facilities. The covenants in the senior credit facility include limitations (each of which is subject to customary exceptions) on our ability and the ability of our current and future subsidiaries to incur additional indebtedness, grant liens, merge, consolidate or engage in asset sales, engage in transactions with affiliates and change the nature of the business conducted by us and our subsidiaries. In addition, the senior credit facility requires us to maintain a total debt to total capitalization ratio (as defined in the senior credit facility) of no more than 0.87 to 1.0. Compliance with this covenant is measured without giving effect to the consolidation of our LIHTC partnerships or other entities under SFAS No. 66 or FIN 46(R). We were not in compliance with the leverage ratio covenant as of the quarter ended December 31, 2008. The required lenders under the senior credit facility have agreed to waive our compliance with the leverage ratio covenant as of the quarters ended December 31, 2008 and March 31, 2009 and the requirement to deliver our audited financial statements within 110 days after year end. These waivers are effective through May 8, 2009.

Our senior credit facility contains certain customary events of default, including a failure to pay principal, interest, fees or other amounts when due, a failure of a representation or warranty to be true in all material respects when made or deemed made, a breach of a covenant, a cross-default, the entry of a material judgment against us, bankruptcy or insolvency events, certain ERISA violations or a "change of control" or "ownership" as defined in the credit agreement. Upon an event of default resulting from non-compliance with the leverage ratio covenant, the senior credit facility lenders owed at least a majority of the aggregate outstanding loans can declare all outstanding loans to be immediately due and payable. Other events of default may allow for certain grace periods and materiality limitations.

agreements can immediately declare all loans due and payable. Any such acceleration of the maturity of our debt obligations would permit our senior noteholders and certain other lenders and contractual counterparties to terminate and/or accelerate the maturity of obligations due under other financing instruments and agreements, including our senior notes. If the lenders, noteholders, and/or other counterparties demand immediate repayment of all of our obligations, we would likely be unable to pay all such obligations. In such an event, if we have not otherwise been able to recapitalize, refinance, or raise additional liquidity by selling some or all of our assets or through some other form of restructuring, we will have to seek to reorganize under Chapter 11 of the United States Bankruptcy Code.

Borrowings under our senior credit facility bear interest at rates that vary according to the denomination of the loan. In particular:

The applicable margins for LIBOR and EURIBOR borrowings drawn under our senior credit facility may vary from 0.600% to 0.925% and are based on the credit ratings that are given to our long-term senior unsecured indebtedness by nationally recognized ratings agencies. Borrowings that have not been repaid when due are also entitled to additional interest at a rate equal to 2%.

In addition to paying interest on outstanding principal under our senior credit facility, we are also required to pay a facility fee to the lenders in respect of any outstanding loans and unutilized commitments. The facility fee rate may vary from 0.100% to 0.175%, depending on the credit ratings

that are given to our long-term senior unsecured indebtedness by nationally recognized ratings agencies that are used to determine the applicable margin for LIBOR and EURIBOR borrowings. In addition, the facility fee is increased by 2% on any portion of any borrowings that remain unpaid when due and we must also pay customary letter of credit fees.

In connection with the Sponsor Transactions, on March 23, 2006, we entered into a $5.25 billion unsecured bridge loan agreement with a syndicate of lenders. We borrowed the full amount available under the bridge loan in connection with the Sponsor Transactions to refinance a portion of the indebtedness that we owed to GMAC at the time. Through December 31, 2007, we repaid $3.5 billion of the bridge loan. In 2008, we repaid $900.0 million of the bridge loan with borrowings under the senior credit facility, leaving an outstanding balance of $833.0 million as of December 31, 2008. In March and April 2009, the holders of approximately 94% of the outstanding principal balance under the bridge loan agreement agreed to extend the maturity date from March 23, 2009 to May 8, 2009. In connection with the initial extension, we repaid approximately $8.2 million to certain lenders under the bridge loan agreement. We have not repaid approximately $48 million owed to one bridge lender that did not elect to extend the maturity of the bridge loan. In connection with the non-repayment, on April 3, 2009 such bridge lender filed suit against us for breach of contract among other claims as described in Item 3 of this Annual Report on Form 10-K.

Our bridge loan agreement contains financial, affirmative and negative covenants that are substantially similar to those contained in our senior credit facility. These covenants include limitations (each of which is subject to customary exceptions) on our ability and the ability of our current and future subsidiaries to incur additional indebtedness, grant liens, merge, consolidate or engage in asset sales, engage in transactions with affiliates and change the nature of the business conducted by us and our subsidiaries. In addition, the bridge loan agreement contains a maximum total debt to total capitalization financial covenant that is the same as that contained in our senior credit facility. We were not in compliance with the leverage ratio covenant as of the quarter ended December 31, 2008. The required lenders under the bridge loan agreement have agreed to waive our compliance with the leverage ratio covenant as of the quarters ended December 31, 2008 and March 31, 2009 and the requirement to deliver our audited financial statements within 110 days after year end. These waivers are effective through May 8, 2009.

Our bridge loan agreement also contains certain customary events of default that are substantially similar to those contained in our senior credit facility, including a failure to pay principal, interest, fees or other amounts when due, a failure of a representation or warranty to be true in all material respects when made or deemed made, a breach of a covenant, a cross-default, the entry of a material judgment against us, bankruptcy or insolvency events, certain ERISA violations or a "change of control" as defined in the bridge loan agreement. These events of default may allow for certain grace periods and materiality limitations. Upon an event of default resulting from non-compliance with the leverage ratio covenant, the bridge loan lenders owed at least a majority of the aggregate outstanding loans can declare all outstanding loans to be immediately due and payable.

to pay all such obligations. In such an event, if we have not otherwise been able to recapitalize, refinance, or raise additional liquidity by selling some or all of our assets or through some other form of restructuring, we will have to seek to reorganize under Chapter 11 of the United States Bankruptcy Code.

Borrowings under our bridge loan bear interest at a rate equal to either (1) a base rate determined by reference to the higher of (a) the prime rate of Citibank, N.A. and (b) the Federal funds rate plus ¹/2 of 1% or (2) an applicable margin plus a LIBOR rate determined by reference to the cost of funds for deposits of U.S. dollars for the interest period relevant to the borrowing adjusted for certain additional costs. Borrowings that have not been repaid when due are also entitled to additional interest at a rate equal to 2%. We have the option, subject to certain conditions, to convert a particular borrowing from one interest rate to the other during the term of the bridge loan.

The applicable margins for LIBOR borrowings drawn under our bridge loan agreement may vary from 0.500% to 0.825% and are based on the credit ratings that are given to our long-term senior unsecured indebtedness by nationally recognized ratings agencies.

In addition to paying interest on outstanding principal under our bridge loan agreement, we are also required to pay a facility fee to the lenders in respect of outstanding principal. The facility fee rate may vary from 0.100% to 0.175%, depending on the credit ratings that are given to our long-term senior unsecured indebtedness by nationally recognized rating agencies. In addition, the facility fee is increased by 2% on that portion of any borrowings that remain unpaid when due.

On May 10, 2007, we issued $2.55 billion aggregate principal amount of notes, consisting of $850.0 million of floating rate senior notes due 2010, $1.2 billion of 5.875% senior notes due 2012 and $500.0 million of 6.300% senior notes due 2017. A portion of the net proceeds of the issuance of those notes was used to repay approximately $2.0 billion due under our bridge loan and the remainder was used for general corporate purposes. On April 30, 2008, we completed an exchange offer for the then-outstanding notes and cancelled the notes issued on May 10, 2007 in exchange for the issuance of publicly registered notes. The 2010 floating rate notes will mature on May 10, 2010, the 2012 fixed rate notes will mature on May 10, 2012 and the 2017 fixed rate notes will mature on May 10, 2017 and are subject to earlier optional or mandatory redemption under specified circumstances. The interest rate payable on the notes is subject to adjustment from time to time if either Moody's or S&P modifies the debt rating assigned to our notes.

In 2008, we purchased and retired $192.5 million of our outstanding floating rate senior notes due 2010. The notes were purchased at a discount to the outstanding principal amount resulting in gains of $61.5 million, net of unamortized issuance costs. These gains are reported as a component of other gains, net, in the consolidated statement of operations for the year ended December 31, 2008.

In the fourth quarter of 2007, we purchased and retired $20.0 million of our outstanding floating rate senior notes due 2010 in a privately negotiated transaction with a third party and recognized a gain of $3.6 million. The gain is reported as a component of other gains, net, in the consolidated statement of operations for the year ended December 31, 2007.

We have been a party to several repurchase agreements with financial institutions located in the United States, which we typically use to fund loans and investment securities. Under a repurchase agreement, we sell loans or investment securities that we hold on our consolidated balance sheet to a counterparty subject to an agreement by the counterparty to sell the same loans or securities back to us at a later date. The repurchase price is generally equal to the original sale price plus an interest factor that is typically based on a benchmark plus a margin. We account for these agreements as indebtedness that is secured by the loans or securities that are sold to the counterparty.

As of December 31, 2008, approximately $47.5 million of our indebtedness was attributable to repurchase agreements. Our obligations under these agreements were denominated in U.S. dollars and typically had a term of one month or less. Because we borrow under repurchase agreements based on the estimated fair value of the pledged loans and securities, and because changes in interest rates can negatively impact the values of the pledged loans and securities, our ongoing ability to borrow under our existing repurchase facilities may be limited and our lenders may initiate margin calls in the event the value of the pledged instruments declines as a result of adverse changes in interest rates or credit spreads.

The following table presents information concerning our obligations under repurchase agreements as of December 31, 2008.

We have established other uncommitted secured funding facilities with financial institutions located in the United States and Asia. The facilities have typically provided for the transfer of loans and investment securities to one or more special purpose entities, some of which issue debt securities against those assets. The secured uncommitted funding facilities currently available to us are primarily through Capmark Bank US. As of December 31, 2008, approximately $1.8 billion of our indebtedness was attributable to indebtedness incurred under these other uncommitted secured facilities. This indebtedness was denominated in U.S. dollars, British pounds sterling and Japanese yen. The balance of these facilities had an aggregate facility limit of $4.0 billion as of December 31, 2008, of which $2.2 billion was available as of that date on an uncommitted basis and subject to compliance with collateral requirements. Issuance of secured indebtedness is subject to limitations under the various facilities. The lenders of these secured funding facilities require a specific amount of eligible assets as collateral for the amounts borrowed.

The following table presents information concerning our other secured funding facilities as of December 31, 2008.

Financing Arrangement		Facility Limit		Amount Drawn		Remaining Availability

		(in thousands)
Capmark Bank US:
FHLB of Seattle(1)		$	1,970,801	$	1,113,504	$	857,297
FRB of San Francisco(2)			1,567,042		250,000		1,317,042

	Total		3,537,843		1,363,504		2,174,339
Non-Capmark Bank US:
Shinsei asset-backed facility(3)			192,299		192,299		—
Société Générale sponsored asset-backed facility(4)			98,355		98,355		—
Merrill Lynch "Roaring Fork" facility			187,619		187,619		—

	Total		478,273		478,273		—

Total		$	4,016,116	$	1,841,777	$	2,174,339

Capmark Bank US's total borrowing capacity with both the FHLB of Seattle and the FRB of San Francisco are reported as of December 31, 2008. Actual borrowing capacity on any business day is subject to change as individual qualifying loans are routinely pledged and de-pledged by Capmark Bank US in the normal course of business. Additionally, changes in loan performance and other collateral-specific criteria may affect whether an individual loan continues to qualify as collateral for Capmark Bank US's outstanding borrowings at either the FHLB of Seattle or the FRB of San Francisco.

Due to deteriorating economic conditions, during the later part of 2008 and in early 2009, Capmark Bank US experienced a decline in the volume of qualifying collateral available to support our FHLB of Seattle and FRB of San Francisco secured borrowings. If a reduction in qualifying collateral pledged at either the FHLB of Seattle or FRB of San Francisco reduces Capmark Bank US's total borrowing capacity to a level below that needed to support then-outstanding secured borrowings, Capmark Bank US is required to take one or more of the following remedial steps: (1) post additional loan collateral; (2) prepay a portion of the then-outstanding borrowings and/or; (3) post a cash deposit to adequately cover any remaining collateral shortfall. Subsequent to December 31, 2008, Capmark Bank US's collateral position with the FHLB of Seattle deteriorated due to a decline in the volume of qualifying collateral and a combination of the remedial steps cited above has been taken by Capmark Bank US as necessary. No material change in Capmark Bank US's available borrowing capacity with the FRB of San Francisco has occurred subsequent to December 31, 2008.

As of December 31, 2008, Capmark Bank US held $48.9 million in FHLB of Seattle capital stock, all of which was required in connection with our outstanding borrowings. Any incremental borrowings from the FHLB of Seattle would require Capmark Bank US to acquire additional capital stock in the amount of 4.5% of any incremental principal borrowed.

Recently, the FHLB of Seattle announced that it will not be paying quarterly dividends on its capital stock and it is not known when the payment of dividends might resume. In the past, following the repayment by Capmark Bank US of its FHLB of Seattle borrowings, any excess FHLB of Seattle capital stock was typically repurchased at par by the FHLB of Seattle shortly thereafter. The FHLB of Seattle also announced its intention to suspend its practice of repurchasing excess stock until further notice. As such, if Capmark Bank US were to reduce our FHLB of Seattle borrowings, we would likely continue to hold an excess FHLB of Seattle capital stock position for an unspecified period of time. However, if Capmark Bank US were to subsequently increase our outstanding FHLB of Seattle borrowings, any then-outstanding excess capital stock would qualify to support the higher borrowing level, thereby satisfying in part or in whole the amount of additional FHLB of Seattle capital stock that Capmark Bank US would otherwise have to purchase.

We have utilized committed secured funding to finance our ownership of certain real estate investments in the United States, Taiwan and Japan. As of December 31, 2008, approximately $164.2 million of our outstanding indebtedness was attributable to indebtedness incurred under committed secured financing arrangements with a number of lenders. This indebtedness was denominated in U.S. dollars, Taiwanese dollars and Japanese yen and had a weighted average maturity of 57 months.

We have Federal funds relationships with financial institutions in the United States that provide an additional uncommitted source of short-term unsecured funding to Capmark Bank US. As of December 31, 2008, we had approximately $146.1 million of outstanding indebtedness attributable to uncommitted revolving credit lines in the United States and the Philippines.

We have entered into term loans and committed credit lines with a number of banks and non-bank finance companies in North America and Asia. We have used these loans to fund our short-term liquidity needs in connection with our lending and real estate-related investment activities. As of December 31, 2008, we had $95.4 million of indebtedness outstanding under these financing arrangements. These borrowings are denominated in U.S. dollars and Japanese yen and bear interest at either fixed or floating rates. As of December 31, 2008, our borrowings under these financing arrangements had a weighted average remaining term to maturity of five months.

Capmark Bank US accepts deposits in the form of time and money market deposits and issues callable and non-callable certificates of deposit in the Brokered CD market. Capmark Bank US's trust operation accepts deposits of principal, interest, escrow and reserve balances that borrowers maintain in custodial accounts for the purposes of paying principal and interest on their loans and funding repairs, tenant improvements, taxes and insurance on the properties that are financed with their loans. Deposits held in a fiduciary capacity are not assets or liabilities of our Company and, accordingly, are not included in our consolidated balance sheet. A portion of these deposits are eligible for investment as

deposits at Capmark Bank US at the discretion of the trust department and may provide us with an alternative form of financing. Deposits that are made with Capmark Bank US are insured by the FDIC, subject to applicable limitations. As of December 31, 2008, Capmark Bank US had $5.7 billion in aggregate deposit liabilities for Brokered CDs.

We are required under GAAP to consolidate the assets and liabilities of certain upper-tier and lower-tier partnerships that form part of our LIHTC funds. These partnerships generally have amounts of secured indebtedness outstanding. As of December 31, 2008, approximately $180.4 million of our outstanding indebtedness was attributable to indebtedness of these partnerships that were required to be included in our consolidated balance sheet under GAAP. In addition, we account for certain securitizations in our European Operations segment as on-balance sheet borrowings secured by a pledge of collateral, due to the structure of the transactions. As of December 31, 2008, balances under these collateralized borrowings for certain securitizations totaled $184.1 million.

We issued $250.0 million in aggregate principal amount of our junior subordinated debentures to Capmark Trust, a Delaware statutory trust, which in turn issued $250.0 million in aggregate liquidation amount of floating rate trust preferred securities to GMAC in exchange for the reduction of an equivalent amount of indebtedness that we owed GMAC at the time. The trust preferred securities entitle GMAC to receive, on a quarterly basis, cumulative cash distributions of amounts actually received by the trust in respect of our junior subordinated debentures, including upon redemption of the junior subordinated debentures. Interest accrues and is payable on the junior subordinated debentures on a quarterly basis at an annual rate equal to three-month LIBOR plus an applicable margin. We have the option to defer interest payments from time to time on the junior subordinated debentures for a period of up to ten years, subject to certain limitations. In addition, interest payments are mandatorily deferred if we do not meet certain financial tests relating to our capital adequacy, interest coverage or adjusted earnings before taxes. As a result of two consecutive fiscal quarters of negative adjusted earnings before taxes and the determination that the average four quarters fixed charge ratio as of the end of the most recently completed applicable fiscal quarter was less than 1.20, we determined that a mandatory deferral of interest payments event occurred in early 2008 and is continuing. We provided notice of such occurrence to the indenture trustee. Upon the occurrence and during the existence of a mandatory deferral event, we may pay interest on the junior subordinated debentures only with the proceeds of eligible equity offerings. If we are unable to raise sufficient proceeds from eligible equity offerings to pay all accrued interest on the junior subordinated debentures prior to the second anniversary of the mandatory deferral event, the applicable margin for the junior subordinated debentures is reduced until the earlier of our compliance with the financial tests referred to above and the tenth anniversary of the mandatory deferral event. We are required to use our commercially reasonable efforts to complete an eligible equity offering if a mandatory deferral occurs and continues for a period of more than one year, or an optional deferral occurs and continues for a period of more than five years. Unless the mandatory deferral events are no longer continuing at the end of the first quarter of 2009, a mandatory deferral event will have occurred and been continuing for a period of more than one year on June 27, 2009. During the existence of a mandatory deferral event, we may not pay dividends on our common stock or make payments of interest or principal on debt securities that rank equal or junior to the subordinated debentures. We currently have no debt securities outstanding that rank equal or junior to the junior subordinated debentures.

The junior subordinated debentures mature on March 23, 2046. Prior to March 23, 2011, the junior subordinated debentures are redeemable upon the occurrence of certain events. From and after March 23, 2011, we may redeem the junior subordinated debentures, at our option, at any time at a

price equal to 100% of their principal amount plus accrued interest. We have agreed, however, for the benefit of certain holders of our senior indebtedness, that we will not redeem the junior subordinated debentures prior to maturity except with the proceeds from the sale of certain qualifying securities.

Debt Refinanced, Repaid or Assumed by GMAC in connection with the Sponsor Transactions

Prior to the Sponsor Transactions, we obtained debt financing under a number of financial instruments with GMAC. GMAC provided credit support for a significant amount of our financial obligations. In connection with the Sponsor Transactions, on March 23, 2006 we refinanced $7.1 billion of unsecured indebtedness and $603.7 million of secured indebtedness that we owed GMAC with borrowings under our senior credit facility, our bridge loan and with trust preferred securities issued to GMAC that are funded with our junior subordinated debentures. In addition, other than with respect to legacy guarantees of some of our outstanding obligations, the credit support provided by GMAC was terminated. Other than with respect to the legacy guarantees of some of our outstanding obligations and the contractual arrangements entered into by us, the Sponsors and GMAC in connection with the Sponsor Transactions as described in Item 13 of this Annual Report on Form 10-K, GMAC's only remaining material financial involvement in our Company consists of its ownership of approximately 21.3% of our outstanding common stock and all of the trust preferred securities of Capmark Trust that are funded with our junior subordinated debentures. We have agreed to use commercially reasonable efforts to cause any remaining guarantees issued by GMAC prior to the Sponsor Transactions to be terminated and to reimburse and indemnify GMAC for any liabilities incurred with respect to those legacy guarantees. See "Certain Relationships and Related Person Transactions and Director Independence—Termination of Guarantees Provided by GMAC; Indemnification" included in Item 13 of this Annual Report on Form 10-K.

In connection with our business activities, we enter into commitments that may give rise to future cash funding requirements. As of December 31, 2008, these commitments consisted of commitments to originate or purchase loans or investments, commitments to fund loans and commitments to provide equity to equity method investees. We also have commitments to sell loans. The future cash payments and receipts that were associated with these obligations as of December 31, 2008 are summarized in the table below. Because these commitments may expire unused and may require certain conditions to be met prior to funding, the amounts shown do not necessarily reflect our actual future cash funding requirements.

		Years to Maturity

Type of Commitment		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
		(in thousands)
Commitments to originate or purchase loans		$	16,290	$	—	$	—	$	—	$	16,290
Commitments to fund construction loans			109,553		354,923		323,262		30,066		817,804
Commitments to fund other loans			130,544		718,434		91,508		205,516		1,146,002
Commitments to purchase investments			44,966		—		—		—		44,966
Commitments to provide equity to equity method investees			7,136		77,993		2,896		73,530		161,555

	Total	$	308,489	$	1,151,350	$	417,666	$	309,112	$	2,186,617

Commitments to sell loans		$	229,572	$	—	$	—	$	—	$	229,572

As an approved multifamily seller/servicer under Fannie Mae's DUS™ program, we are responsible for assuming a portion of the losses that may result from a borrower's payment default on the loans that we have sold to Fannie Mae. Our loss sharing obligations are determined based on agreed loss sharing formulas. We generally are required to assume responsibility for the first 5% of the unpaid principal and a portion of any additional losses up to a maximum of 20% of the original principal balance of the loan. Any significant losses under this program would have an adverse effect on our results of operations and financial condition.

The table above reflects the future cash payments and receipts associated with commitments for the entire Company. The future cash payments and receipts solely associated with the commitments for Capmark Bank US as of December 31, 2008 are summarized in the table below:

		Years to Maturity

Type of Commitment		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
		(in thousands)
Commitments to originate or purchase loans		$	16,290	$	—	$	—	$	—	$	16,290
Commitments to fund construction loans			18,162		262,980		314,957		30,066		626,165
Commitments to fund other loans			34,888		472,893		91,259		3,280		602,320

	Total	$	69,340	$	735,873	$	406,216	$	33,346	$	1,244,775

Commitments to sell loans		$	169,473	$	—	$	—	$	—	$	169,473

The future cash payments and receipts associated with the commitments for all non-Capmark Bank US entities as of December 31, 2008 are summarized in the table below:

		Years to Maturity

Type of Commitment		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
		(in thousands)
Commitments to fund construction loans		$	91,391	$	91,943	$	8,305	$	—	$	191,639
Commitments to fund other loans			95,656		245,541		249		202,236		543,682
Commitments to purchase investments			44,966		—		—		—		44,966
Commitments to provide equity to equity method investees			7,136		77,993		2,896		73,530		161,555

	Total	$	239,149	$	415,477	$	11,450	$	275,766	$	941,842

Commitments to sell loans		$	60,099	$	—	$	—	$	—	$	60,099

In the ordinary course of our business, we enter into contractual arrangements that may require future cash payments. As of December 31, 2008, our contractual obligations primarily consisted of long-term borrowings and deposit liabilities, derivatives instruments, FIN 48 obligations and operating

leases. The future cash payments that were associated with these obligations as of December 31, 2008 are summarized in the table below.

	Payments due by Period

Type of Obligation	Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
	(in thousands)
Borrowings and deposit liabilities(1)	$	4,319,402	$	5,667,317	$	3,228,741	$	1,964,968	$	15,180,428
Derivative instruments(2)		241,615		365,431		155,569		122,634		885,249
FIN 48 obligations(3)		28,493		17,825		71,203		—		117,521
Operating leases and other(4)		40,158		71,886		65,038		9,150		186,232

Total	$	4,629,668	$	6,122,459	$	3,520,551	$	2,096,752	$	16,369,430

We enter into guarantees in the ordinary course of our business, including, among others, guarantees in support of some of our LIHTC sponsored funds, NMTC sponsored funds and guarantees of payment of some of the agency and construction loans that we originate and certain other transactions.

We hold variable interests in syndicated affordable housing partnerships where we provide unaffiliated investors with a guaranteed yield on their investment. As of December 31, 2008, our estimate of actual loss under these yield guarantees was $264.8 million and is reported as a component of real estate syndication proceeds and related liabilities in the consolidated balance sheet. As of December 31, 2008, our maximum exposure to loss under the yield guarantees was approximately $1.6 billion. This maximum exposure is extinguished over the lives of the guaranteed syndicated affordable housing partnerships as annual tax benefits are delivered to investors.

We have been involved in several types of off-balance sheet arrangements including securitization activities. The primary purposes of these transactions are to:

Securitization activities have been important to our growth and profitability. The decrease in our securitization activities as a result of recent market disruptions has reduced the distribution channels for our lending operations and disrupted our mortgage banking and servicing activities, which in turn have adversely impacted our operating profit.

As part of our securitization activities, we generally sell assets to bankruptcy-remote subsidiaries. These bankruptcy-remote subsidiaries are separate legal entities that assume the risks and rewards of owning the loan receivables. Securitizations are structured to provide a means of monetizing investments through the use of a bankruptcy-remote subsidiary. Upon acquiring assets that are to be securitized, our bankruptcy-remote subsidiaries establish separate trusts to which they transfer the assets in exchange for the proceeds from the sale of asset- or mortgage-backed securities issued by the trust. The trusts' activities are generally limited to acquiring the assets, issuing asset-backed or mortgage-backed securities, making payments on the securities issued by them and furnishing periodic reports to investors. Due to the nature of the assets held by the trusts and the limited nature of each trust's activities, most trusts qualify as Qualified Special Purpose Entities ("QSPEs") under SFAS No. 140 and, accordingly, are not consolidated in our financial statements.

As part of our securitization activities, we generally agree to service the transferred assets for a fee and may earn other related ongoing income. We may also retain an interest in the securitization trust as partial payment for the assets transferred to it or make an equity investment in a fund that purchases interests in one of our securitization trusts. A retained interest in a securitization trust may consist of senior or subordinated interests, may be investment grade, below investment grade or unrated and may include principal-only or interest-only securities. A subordinated interest, sometimes referred to as a "B-piece" or a "first loss position," typically entitles its holder to receive payments only after all investors holding more senior interests are paid in full. We record our retained interests in unconsolidated securitization trusts as investment securities on our balance sheet. We also purchase derivative financial instruments in order to facilitate securitization activities, as further described in Note 16 to our audited consolidated financial statements included under Item 8 of this Annual Report on Form 10-K.

The following table presents the fair values of our retained interests from securitization transactions as of the dates indicated.

We recognized a pre-tax loss of $2.7 million and $1.0 million for the years ended December 31, 2008 and 2007 and pre-tax gains of $43.7 million for the period from March 23, 2006 to December 31, 2006 and $16.7 million for the period from January 1, 2006 to March 22, 2006, respectively, from the securitization of financial assets, inclusive of gains and losses related to hedging activities.

Cash flows received from (and paid to) securitization trusts consisted of the following for the periods indicated.

	Successor									Predecessor

	Year ended December 31, 2008			Year ended December 31, 2007			Period from March 23, 2006 to December 31, 2006			Period from January 1, 2006 to March 22, 2006
	(in thousands)
Proceeds from new securitizations	$	31,796		$	3,312,148		$	1,745,500		$	3,269,402
Servicing fees received		21,260			22,199			5,470			13,393
Other cash flows received on retained interests		24,259			29,618			26,901			18,930
Servicing advances		(170,387	)		(199,470	)		(54,793	)		(156,840	)
Repayments of servicing advances		163,681			190,235			52,360			166,067

For the year ended December 31, 2008, we entered into one loan securitization transaction in which we sold $34.8 million of loans to an off-balance sheet securitization trust and incurred a net loss on sale totaling $2.7 million.

The instruments governing some of our securitization transactions and other off-balance sheet transactions contain customary provisions that require us to purchase specific assets from our securitization trusts and indemnify the issuer with respect to any material misstatement or omission with respect to information we provide for inclusion in the applicable offering documents. In connection with certain asset sales and securitization transactions, we typically make customary representations and warranties to the purchaser of our assets that relate to the characteristics of the assets transferred. These clauses are intended to ensure that the terms and conditions of the sales contracts are met upon transfer of the assets. Prior to any sale or securitization transaction, we perform due diligence with respect to the assets to be included in the sale to ensure that they meet the purchaser's requirements, as described in the representations and warranties. Due to these procedures, we believe that the potential for loss under these arrangements is remote. Accordingly, we have not recorded a liability in our consolidated balance sheet relating to these potential obligations. The maximum potential amount of future payments that we could be required to make would be equal to the current balances of all assets subject to these securitization or sale activities. We do not monitor the

total value of assets historically transferred to securitization vehicles or through other asset sales and, as a result, we are unable to develop an estimate of the maximum payout under these representations and warranties. As of December 31, 2008, we had not been required to repurchase any assets under these provisions.

We participate as a lender in Fannie Mae's DUS™ program and other similar programs. As a condition to Fannie Mae's delegation of responsibility for underwriting, originating and servicing of loans under the program, we assume a limited first-dollar loss position throughout the term of each loan we sell to Fannie Mae. As of December 31, 2008, we maintained a liability for such potential losses in the amount of $20.9 million. The maximum amount of loss we were exposed to under these programs was $693.9 million as of December 31, 2008.

We sponsor NMTC funds that make investments in qualifying CDEs that receive new markets tax credit allocations under a federal program that is designed to increase the availability of investment capital in low-income communities. We have determined that our NMTC funds are variable interest entities under FIN 46(R) and that we were the primary beneficiary of all but seventeen of the NMTC funds that we had sponsored as of December 31, 2008. The NMTC funds of which we were not the primary beneficiary had total assets of $376.7 million as of December 31, 2008. Our exposure to loss relating to these NMTC funds was $217.1 million as of that date, representing the amount of financing we have provided to the funds.

We have sponsored CDOs in which we may retain a subordinated or equity interest and for which we serve as the collateral manager. When we sponsor a CDO, we establish a bankruptcy-remote special purpose entity that purchases a portfolio of assets that may consist of commercial mortgage loans and other real estate-related securities and issues debt and equity certificates, representing interests in the special purpose entity. Certain of the CDOs that we have sponsored were initially structured, or have been restructured, as QSPEs under SFAS No. 140 and, accordingly, are not consolidated in our financial statements.

The CDOs that we have sponsored that have not been structured as QSPEs are variable interest entities under FIN 46(R). We have determined that we were not the primary beneficiary of any of these entities as of December 31, 2008 and, accordingly, have not consolidated them in our financial statements. These CDOs had total assets of $4.1 billion as of December 31, 2008. Our exposure to loss relating to these CDOs was approximately $32.0 million as of that date, representing the value of our retained interests in these entities including our indirect interests in the CDOs held through our co-investment in a sponsored investment fund.

Credit risk represents the risk that a financial loss will result from the failure of a borrower, obligor or counterparty to perform its obligations. We have developed and implemented formal, systematic credit risk management policies and processes for our lending activities that are designed to preserve the independence and integrity of credit-related decisions and to ensure that credit risks are accurately assessed, are properly approved, and are monitored and actively managed at both the transaction and portfolio levels. These policies and processes employ specific limits on credit approval authorities, the use of a programmatic risk-rating methodology, certain concentration limitations and independent credit risk monitoring and asset management procedures. In order to meet our credit risk

management objectives, we seek to maintain a risk profile that is diverse in terms of property type, geographical location and single asset exposure. Historically, we have managed this diversification through the use of asset sales, including syndications, participations and securitizations and other risk reduction techniques.

Challenging economic conditions have resulted in declining loan asset quality in recent quarters, particularly during the fourth quarter of 2008, resulting in adverse credit migration and increases in non-performing loans. The factors contributing to the decline in asset quality include weak economic conditions, market illiquidity, declining commercial real estate fundamentals, our concentration of transitional real estate risk, and declining real estate values.

2008 was characterized by a lack of available financing for commercial real estate and a corresponding scarcity of purchases and sales of real estate. Typically, the primary repayment source for a commercial real estate loan is refinancing, or in some cases, the sale of the property. The market illiquidity experienced in 2008 resulted in a lack of viable repayment sources for maturing loans, which has contributed to increased loan extension activity. We have granted, and may in the future continue to grant, extensions of loans, subject to negotiation of acceptable consideration for such extensions. The nature of such consideration depends on the credit profile of a given loan, but might include a partial pay-down and/or an increased interest rate. If we and the borrower are unable to reach mutually acceptable extension terms, and the borrower is unable to refinance or otherwise repay the loan due to market conditions, the loan will default and be classified as non-performing. Such circumstances have contributed to increases in defaults and non-performing loans.

Current recessionary economic conditions have reduced demand by users (tenants) of commercial real estate. Reductions in demand impact current property cash flows and the expectation for future cash flows. Our loan portfolio is significantly comprised of construction loans and interim, floating rate loans secured by "transitional" real estate. The repayment of such loans is dependent on the construction and renovation, and subsequent leasing, of collateral and debt service payments for such loans are dependent on capitalized reserves or subsidization by sponsors. Reductions in demand by users of commercial real estate have caused certain of these loans to fail to achieve underwritten expectations for leasing and cash flow, contributing to increases in defaults and non-performing loan classifications.

The scarcity of commercial real estate financing, declining fundamentals and generally weak economic conditions have contributed to reductions in commercial real estate values. This trend is putting additional pressure on our loan portfolio, causing loan-to-value ratios to rise. During the fourth quarter of 2008, we obtained updated appraisals on approximately $1.8 billion of loans. The new appraisals in combination with other loan-level data resulted in the detection of impairment in certain loans, contributing to the increase in loans classified as non-performing in the fourth quarter of 2008.


ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Nevada (State or other jurisdiction of incorporation or organization)		91-1902188 (I.R.S. Employer Identification No.)
116 Welsh Road
Horsham, Pennsylvania		19044
(Address of principal executive offices)		(Zip Code)


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o



PART I
Item 1.	Business	1
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	30
Item 4.	Submission of Matters to a Vote of Security Holders	31
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	31
Item 6.	Selected Financial Data	32
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	108
Item 8.	Financial Statements and Supplementary Data	116
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	221
Item 9A.	Controls and Procedures	221
Item 9B.	Other Information	221
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	222
Item 11.	Executive Compensation	227
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	249
Item 13.	Certain Relationships and Related Transactions, and Director Independence	252
Item 14.	Principal Accounting Fees and Services	259
PART IV
Item 15.	Exhibits, Financial Statement Schedules	261
Signatures		262
Exhibit Index		264

				As of December 31,

				2008						2007
	Minimum Percentage to be Well- Capitalized			2008						2007
Ratio	Minimum Percentage to be Well- Capitalized			Capmark Bank US(1)			Escrow Bank			Capmark Bank US			Escrow Bank
Tier 1 leverage ratio		5.0	%(2)		12.5	%		16.0	%		11.6	%		61.9	%
Tier 1 risk-based capital ratio		6.0			13.3			405.4			12.2			387.5
Total risk-based capital ratio		10.0			15.9			405.4			14.6			387.5

		As of December 31,

Ratio	Ratio Threshold	2008			2007
Capital Adequacy	15% Minimum(1)		46.5	%		63.5	%
Liquidity	100% Minimum(2)		18,235.0			113.0
Large Exposure Limit	25% Maximum(3)		10.7			12.8

	Year ended December 31,

Net (Losses) Gains	2008			2007			2006
Net (losses) gains on loans	$	(1,029,772	)	$	(128,413	)	$	141,979
Net (losses) gains on investments and real estate(1)		(326,949	)		65,104			(15,805	)
Other gains (losses), net(2)		197,785			75,944			(8,874	)

Total	$	(1,158,936	)	$	12,635		$	117,300

	Short-Term				Long-Term

Rating Agency	Rating		Outlook		Rating	Outlook
S&P		—		—	B+	Negative
Moody's		—		—	B2	Negative
Fitch		B		Negative	B-	Negative

	Rating Agency

Type of Servicing	S&P	Fitch	DBRS
U.S. primary servicing	Strong	CPS2-	Superior
U.S. master servicing	Strong	CMS3-	Superior
U.S. special servicing	Strong	CSS2-	Not Rated
United Kingdom/Ireland primary servicing	Strong	CPS2+	Superior
United Kingdom/Ireland special servicing	Strong	CSS2	Not Rated

Counterparty(1)		Facility Limit		Amount Drawn		Remaining Availability

		(in thousands)
JPMorgan(2)		$	47,472	$	47,472	$	—
Pershing LLC			12,683		—		12,683

	Total	$	60,155	$	47,472	$	12,683