14 posts tagged “mortgage”

Edward J. DeMarco, acting Director of the Federal Housing Finance Agency (FHFA), addressed the U.S. Senate Committee on Banking, Housing and Urban Affairs last week to address the future of the mortgage market. The FHFA is serving as conservator of Fannie Mae and Freddie Mac which tally combined losses of $165 billion from July 2007 through the first half of 2009, with $47 billion accounting for the first half of 2009. DeMarco said that their financial performance continues to be dominated by credit-related expenses and losses stemming principally from purchases and guarantees of mortgages originated in 2006 and 2007.

"These two companies have $5.3 trillion in mortgage exposure. Given the Enterprises' importance in the mortgage market, Enterprise activities to stabilize the housing and mortgage markets are closely linked to conserving assets," said DeMarco. "Over the long term, effective mortgage modifications, refinancings, short sales, and other loss mitigation activities assist homeowners and neighborhoods and will save the Enterprises billions of dollars."

Commercial Property Executive published an article about the Fannie and Freddie mortgage defaults. An excerpt:

What DeMarco said to the Senate Banking Committee was a little more formal than a Yogism: "We remain concerned and recognize the risk associated with increasing numbers of seriously delinquent loans."

He then backed up that concern with some statistics: the rate of seriously delinquent mortgages at Fannie and Freddie total 4.2 percent and 3.1 percent, respectively. What the government plans to do about Fannie and Freddie, now that they have been de facto government agencies for about a year, is still an open question, though reportedly it will be addressed in the Obama administration's proposed 2011 federal budget, which will be released in February.

For more news and information visit Blumberg Capital Partners.

The New York branch of the Bank of China has provided a non-recourse loan of approximately $120 million to W.P. Carey & Co. for the New York Times Company's Midtown Manhattan headquarters. Carey bought the property this past spring in a $225-million sale-leaseback deal for 21 floors of the building, leasing the space back to the New York Times for 15 years with an option to repurchase the property in the 10th year for $250 million.

"Despite the fact that a large number of lenders remain on the sidelines, especially for loans over $50 million, we continue to see strong interest for loans on high-quality properties that are owned by strong, experienced sponsors," said Steve Kohn, president of Cushman & Wakefield Sonnenblick Goldman, after securing the loan for Carey. The New York Times and joint venture partner Forest City Ratner Companies developed the 52-story tower over a two-year period beginning in 2005 at a cost of approximately $800 million; Forest City still owns the building's remaining 750,000 square feet of space accoring to CPE.

For more news and information, visit Blumberg Capital Partners.

CoStar published an article today investigating the pricing trends for commercial mortgage-related investments, finding the conditions not so separate from those in play on the property side -- even with funding available for debt and mortage investments, there's still a disconnect between what buyers are willing to pay and what sellers are willing to accept. Several industry experts weighed in on the issue, including Michael Singh, managing director of Jones Lang LaSalle Americas in LA: "If notes are available at the right price, investors are ready to move... pricing has been a big sticking point as seen in the continued wide bid-ask spread. Lenders generally seek to recover 80% or more on performing notes while investors typically bid sub 60%."

David S. Akeman, director of capital markets of Stan Johnson Co. in Tulsa, OK, told CoStar Group: "There is a market, but I hear that most lenders or note holders typically aren't discounting the performing commercial real estate notes enough to attract buyers. Many I have personally spoken with are still trying to discount less than 10%. One life company is trying to hold out for par on a vacant Stock Building Supply (property) that is no longer paying rent. This will change in the future, but right now the lenders are stressed, not distressed."

For more news and information, visit Blumberg Capital Partners.

According the MBA's National Delinquency Survey, the delinquency rate for mortgage loans was 8.22% on a non-seasonally adjusted basis, down 41 basis points from 8.63% in the fourth quarter of 2008.  Delinquency rates always decline in the first quarter of the year due to a variety of seasonal factors; after accounting for these factors, the seasonally adjusted delinquency rate was 9.12% of all loans outstanding as of the end of the first quarter of 2009, up 124 basis points from the fourth quarter of 2008, and up 277 basis points from one year ago.

"The increase in the foreclosure number is sobering but not unexpected.   The rate of foreclosure starts remained essentially flat for the last three quarters of 2008 and we suspected that the numbers were artificially low due to various state and local moratoria, the Fannie Mae and Freddie Mac halt on foreclosures, and various company-level moratoria," said Jay Brinkmann, chief economist at Mortgage Bankers Association.  "Now that the guidelines of the administration's loan modification programs are known, combined with the large number of vacant homes with past due mortgages, the pace of foreclosures has stepped up considerably."

For more news and information, visit Blumberg Capital Partners.

How Do the Markets Relate? Philip Blumberg of Blumberg Capital Partners comments on how problems in the residential market can -- and do -- effect other markets.  For more news and information, visit Blumberg Capital Partners.

The House of Cards Economy: Philip Blumberg of Blumberg Capital Partners discusses the domino effect within the economy and the time it takes to fix the damages done within the system.  For more news and information, visit Blumberg Capital Partners.