Mortgage Banking

Making sense of commercial real estate finance.

Archive for February, 2008

The Top Ten Mortgage Banking/Broker Companies for 2007

Posted by Jordan Crouch on February 26, 2008

The following is a list of the top ten mortgage banking/brokerage companies ranked by total origination volume between 10/1/2006 and 9/30/2007 . I am proud to say my firm made the list (#5) via our affiliation in the Strategic Alliance Mortgage LLC .

1. WACHOVIA CORP ($57.6B)
2. DEUTSCHE BANK COMMERCIAL REAL ESTATE GROUP ($55.5B)
3. HOLLIDAY FENOGLIO FOWLER L.P. ($34.5B)
4. MERIDIAN CAPITAL GROUP L.L.C. ($15.5B)
5. STRATEGIC ALLIANCE MORTGAGE L.L.C. ($14.1B)
6. NORTHMARQ CAPITAL INC. ($12.1B)
7. CARLTON ($7B)
8. Q10 CAPITAL L.L.C. ($6.2B)
9. THE ACKMAN-ZIFF REAL ESTATE GROUP L.L.C. ($5B)
10. HYPO REAL ESTATE CAPITAL CORP. ($4.9B)

If my math is correct, these top ten firms originated over 212 Billion dollars in loans last year. With current credit markets in the dumps, what will 2008’s totals be? I don’t see Wachovia, Deutsche, or Hypo  having banner years. Each of these firms had a significant CMBS portion of their respective originations. CMBS loans are completely non-existent so far this year,  meaning the above list might look different at this time next year.

Click here for the complete list of companies.

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The Current Credit Market

Posted by Jordan Crouch on February 25, 2008

There is talk of another cut in the Fed Funds rate. If this happened it would be in mid-March when the Federal Reserve meets next. What effect this would have on the Ten Year Treasury Yield is tenuous. If the concerns of rising inflation are correct, the 10 year T-Bill will begin rising, not lowering, making interest rates on commercial loans rise. If this is the case, the days of 5% (and even 6%) interest rates will be a thing of the past.

All but a select few lenders’ loan allocations for 2008 will be smaller than 2007. And with the conduits out for what is expected to be the rest of this year, it means there is less money chasing deals. Lenders are being ultra conservative in underwriting, using lower LTV’s and overall choosier on what deals they will do.

What should the typical borrower do in this type market? If a borrower is anticipating needing a loan within the next 9 to 14 months, getting that loan now is the best option. Even with a potential Fed Funds rate cut, the threat of inflation forcing the 10 year T-bill higher is a real possibility.

Posted in Capital Markets | Leave a Comment »

State of Downtown (Seattle)

Posted by Jordan Crouch on February 11, 2008

Quick Economic Notes:
At the State of Downtown breakfast last week the mayor and governor both spoke about the economic success of the Northwest compared to the rest of the country. Visit downtownseattle.com to see copious amounts of data justifying that claim. Also check out this aerial photo of all development projects in Seattle (there’s quite a few).

In other economic news, global policymakers have raised the estimated losses from the subprime credit crunch to almost $400 Billion. $150 Billion was the previous estimate made last year. This leads some to believe that the economy hasn’t hit the bottom yet. Either way the effect on commercial real estate locally should be minimal. 

Posted in Finance 101, Seattle Real Estate | Leave a Comment »

Amazon Novel Contest

Posted by Jordan Crouch on February 5, 2008

This isn’t real estate related. My wife is a writer and is currently one of the semifinalist in Amazon’s Breakthrough Novel Award contest. Narrowed down from over 5000 writers, the semi-finalists have until March to gather “customer” reviews. Here is the link to her story. Please check it out and leave a review if you have time. Thanks. And Good Luck Staci!

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Surprise Surprise

Posted by Jordan Crouch on February 4, 2008

-Not surprising anyone, the Federal Reserve lowered the Fed Funds rate for the second time in two weeks. It is currently at 3%.

-Microsoft surprises the world by offering to buy Yahoo for $45B last Friday. Google denounced the deal immediately.

-The major market indexes continue to roller coaster on the threat of an economic recession.

-Commercial Real Estate Lenders are as cautious as ever, though most are still doing loans.

Rates:

TODAY

Last Mth

Last Year

5 Yr T-Bill:

2.77 %

3.19%

4.82%

10 Yr T-Bill:

3.65%

4.38%

4.82%

LIBOR-30 Day

3.18%

4.51%

5.32%

Posted in Capital Markets | Leave a Comment »