Mortgage Banking

Making sense of commercial real estate finance.

Archive for the ‘Lenders’ Category

Lender Questions

Posted by Jordan Crouch on January 20, 2009

Peter Maclennan recently posted the blog post “Nine Questions to Ask a Commercial Lender“. While it is directed to mortgage brokers, it is good food for thought for anyone currently in commercial real estate.

  1. What are your minimum and maximum loan amounts?
  2. Do you have a geographical limitation?
  3. What property types do you prefer?
  4. How long does your average loan take to close? What is the shortest amount of time you have personally seen a deal close?
  5. What is your maximum loan-to-value ratio?
  6. What is your minimum debt-service coverage ratio?
  7. What information do you require from the borrower in a loan package?
  8. What is the best way to contact you if I have a deal?
  9. What loans are you the most competitive on?

Posted in Finance 101, Lenders | 5 Comments »

2009 Will be a Great Year

Posted by Jordan Crouch on January 6, 2009

If you read the headlines, listen to others and mope about, this year will be exactly what you expect it will be…bad. But if you focus on the positive aspects of this market, there is the potential for 2009 to be a great year. What are those positives???

  • Lenders with Money – Though banks and others are on the sidelines, Fannie Mae, Freddie Mac, and Life Insurance companies are still lending. Each January Life companies get a new bucket of money to lend. They are not lending on every deal but for the right one, there are lenders out there. Fannie and Freddie are (for the moment) government controlled, so they won’t stop lending either.
  • Opportunities to Buy – With many Commercial Real Estate owners struggling, properties will need to be sold quickly or lenders will take them over. And since lenders are in the lending business not the property owning business, lenders will divest these properties as soon as possible. Someone with real estate experience and a solid team of experts (lender, RE broker, attorney, etc.) can take advantage of these opportunities to purchase real estate at a great deal.
  • Opportunities to Refinance – Rates are still at historical lows compared to a decade or two ago. If you are a property owner, the ability to lock in these low rates  for 10+ years is a fantastic opportunity. It is hard to say if/when rates will be this low again.

Posted in Capital Markets, Lenders | 3 Comments »

Happy New Year

Posted by Jordan Crouch on January 5, 2009

  • ECONOMIC NEWS: Uncertainty greets the new year as investors grapple with a volatile market, President-Elect Obama presents his proposed stimulus package, and bond yields, especially the Ten Year Treasury Bill, are at all time lows. The continued fallout from Barry Madoff’s Ponzi scheme is also affecting the market.
  • LENDING MARKET: With Banks licking their wounds from 2008 and conduits still a distant memory, Life Insurance companies look to be the dominant lender for 2009 in addition to Freddie Mac and Fannie Mae. Expect more conservative underwriting, higher cap rates and lower loan to values in 2009. Most property types will be financeable in ’09 with apartments, industrial and officer properties being the preferred type (in that order).
  • REFERRALS: My business is built on referrals. For those that referred someone to me in 2008 I deeply appreciate it and thank you for trusting me with your recommendation. I’m always looking to educate and assist people with financing commercial real estate. If you know of a client, associate or yourself who would like to look at a refinance or purchase, I’d love to help. If you’re comfortable sending me their name or giving my name out, please do so. Thanks again. I appreciate your support.  Here’s to a successful 2009!

Posted in Capital Markets, Lenders | Leave a Comment »

Prepayment Penalties in Today’s Market

Posted by Jordan Crouch on December 12, 2008

The SquareFeet Blog has an excellent post detailing how the shifting treasury yields are affecting prepayment penalties. Read the article here. One thing the post does not mention is that for a borrower that is forced to sell a property, one way to avoid these hefty prepayment penalties is to have the new borrower assume the loan. This usually can be done with a 1% fee versus paying the prepayment penalty of 10% (using the example in the post).

Posted in Capital Markets, Finance 101, Lenders | 3 Comments »

Fannie Mae Update

Posted by Jordan Crouch on September 9, 2008

Business as usual…That’s what I’m hearing from my Fannie Mae contact. Spreads have lowered a bit, combined with the T-bill yield drop, rates are looking good. The only change that Fannie has made so far is lowering the amount of Interest Only for Tier 2 deals. A Tier 2 deal is a highly leveraged, low DSCR loan where as a Tier 4 deal is low LTV, high DSCR (Tier 3 is in between). Tier 4 loans can still get 10 years of Interest Only, Tier 2 loans now only get two years and Tier 3 loans can get five years). If you must have 10 years of Interest Only, contact me at Jordan(at) ASAP. There is still a few days to get 10 years IO.

Check out this link for explanation of the terms used in this post.

Posted in Capital Markets, Lenders | 1 Comment »