mortgage simple definition: 2008 07, Mortgage Lending Reaches Extremes

2008 07, Mortgage Lending Reaches Extremes

2008 07, Mortgage Lending Reaches Extremes. Kelvin Kaemingk's 9.20.19 Mortgage Market Update Chalk Talk Radio

2008 07, Mortgage Lending Reaches Extremes video duration 2 Minute(s) 11 Second(s), published by RECI on 23 07 2019 - 03:30:20.

Chicago, Illinois, July 15, 2008 — Commercial mortgage lenders are becoming more scarce as the second half of the year approaches
Lenders are reluctant to Redwood Mortgage is a direct private money lender based in San Mateo, CA
They provide short-term and long-term private financing to real estate investors .

Mortgage lenders use ratios to determine whether borrowers have the economic ability to repay the loan
FHA, VA, and conventional lenders all use monthly . Work ethic is everything to Kelvin Kaemingk
Kelvin has over two decades of helping people with their finances and he loves every minute and challenge.

Chicago, Illinois, July 15, 2008 — Commercial mortgage lenders are becoming more scarce as the second half of the year approaches. Lenders are reluctant to fund projects based on any “conventional” norms. Instead, funding sources reach for two different, and extreme, lending profiles: (1) Low-Leverage and (2) Opportunity financing. Each of these profiles are discussed as follows:

Lower-Leverage:

Even in today’s market, competitive mortgage pricing is selectively available to commercial property and multifamily property owners requiring lower leverage based on:

 Availability: Limited to life insurance companies for terms of five years or longer. Banks and credit companies providing short-term funds.
 Leverage: Low-leverage is defined as fifty percent or less.
 Pricing: Starting as low as 350 basis points over comparable term treasuries. On occasion, the agencies may dip below such levels on extremely prime-quality multifamily projects. However, most common spreads are between 400 to 450 basis points over comparable term treasuries for fixed rate loans. Veritable rate loans are priced over LIBOR or Prime, generally starting at at least 300 basis points above.
 Guarantees: Full personal recourse required for bank deals, while life insurance companies and pension funds continue offering on recourse.

Opportunity Financing:

Opportunity financing represents substantial yield premiums for projects that don’t fit into the “Lower-Leverage” category discussed above. For the most part, this financing format covers second-tier locations, leverage above 65%, older conventional properties and newer, non-conventional properties (e.g., special-purpose and lodging properties). Pricing starts in the mid-teen-percent range