Mortgage Banking

Making sense of commercial real estate finance.

Weekly Rates – July 14, 2008

Posted by Jordan Crouch on July 14, 2008

  • ECONOMIC NEWS: Fannie Mae and Freddie Mac are hurting from mortgage losses. Both companies’ stocks were hammered last week, dragging down the entire market, with the Dow reaching below 11,000 for the first time in two years. Yesterday the federal government announced a three part plan to stabilize Fannie and Freddie. From the statement “Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current …Their support for the housing market is particularly important as we work through the current housing correction.” Also affecting the economy is the price of oil, now at $145 a barrel.
  • LENDING MARKET: Life Insurance Companies and regional banks are still active in the lending market, though still at a conservative level. Spreads are in the high 200’s, meaning rates are in the 6.25 – 6.75% range. The four main property types (Office, Retail, Industrial, Multi-Family) are all getting loans, with MF getting the majority.
  • FINANCE TERM OF THE WEEK: Recourse – A loan that is secured by the property and the owner’s personal liability. If the owner defaults, the lender will take back the property as well as personal property to repay the loan.

2 Responses to “Weekly Rates – July 14, 2008”

  1. cmbs100 said

    The Feds intervention in Freddie and Fannie has been a long time coming. Unfortunately, there have been too many people asleep at the switch. The cost to the taxpayers will be enormous and there will be no retribution to those who have caused this debacle. Greed, personal gain, and ineptness of many have brought us here. The Fed’s will print the check. The cookie jar has long been depleted.

  2. It seems that taxpayers are getting the shaft this year. The eco. surplus checks, bailouts of Fannie, Freddie, Bear Sterns, et. al. When is it going to stop? On the flip side, what is the cost-benefits analysis of all of this? Are these bailouts more helpful or hurtful? Any economists out there able to answer this???

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