10 posts tagged “refinance”

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 Graybar Building

SL Green Realty Corp. (SL Green) has secured a $145 leasehold mortgage for the refinancing of 420 Lexington Avenue in NYC provided by TIAA-CREF. Cushman & Wakefield Sonnenblick Goldman served as the advisors to SL Green; Morton Holliday, managing director at Cushman, noted that the financing arrived "during one of the most turbulent times in the credit market history and in a severe economic downturn".

The property, known as the Graybar Building, was named after one of its original tenants Graybar Electric, and is a 31-story, 1.5-million square foot office and retail building towering above Grand Central Terminal. The building is currently 97% leased with major tenants including Bank Leumi USA, Metro-North Commuter Railroad Co., New Plan Excel Realty and New York Life Insurance. SL Green acquired the property in 1998 and has completed an $84 million capital improvement program that included a lobby upgrade, façade repair, new storefronts and significant leasing related tenant improvements.

For more news and information visit Blumberg Capital Partners.

Philip Blumberg appeared on CNBC Squawk Box Europe today on a segment titled "The Reality of Real Estate".

To view the full transcript, visit Blumberg Capital Partners.

Blumberg Capital Partners was featured today in a New York Post article, "Banks Worry About Next Wave of Loan Defaults".

An excerpt:

Phillip F. Blumberg, chairman of Blumberg Capital Partners, thinks banks are really worried about the commercial real estate loans they issued during the orgasmic 2000s. That’s the reason, says Blumberg, banks are remaining conservative in their lending.

Credit cards may be bad but commercial real estate is worse.

"It’s absolutely frightening," says Blumberg, who adds that he sold most of his real estate holders before the bust. And the most dangerous time for banks will be 2010 to 2013 when $1 trillion in commercial real estate loans will mature and — like homeowners before them — owners of commercial properties will need to refinance.

To read the rest of this article, click here.

Blumberg Capital Partners, one of the nation's leading investment fund managers, today said that an analysis of commercial real estate values, leasing and vacancy trends by its staff shows that any federal bailout of the industry will require a painful, significant deleveraging to succeed.

The company said any bailout plan is working against a legacy of debt time bombs created by imprudent, unrealistic buyers who over-borrowed during the peak of the market in anticipation prices would continue rising unabated.

The Blumberg analysis shows that maturing debt obligations will come under even more stress in 2009 with leasing rates poised to drop an additional 20% to levels not seen since 2002, and with office vacancies potentially rising to 25% by the end of the year. Indeed, the nation's office market could take until 2011 to stabilize, the company's analysis shows.

"Creating a refinancing stimulus is helpful to thaw the credit freeze, but these ticking debt time bombs will make it difficult for our public officials to get their arms around this problem," said Philip Blumberg, Chairman and CEO, as well as firm's chief investment strategist. "Now, because the global economic recession has worsened over the past few weeks, coupled with layoffs at the front end of the cycle, demand for office space nationally is falling. Until companies can weather this storm and start expanding again, prices will remain low for landlords, and vacancies will rise."

To read the full article and analysis, click here.