The glossary of terms in commercial real estate (CRE) lending is packed with synonymous and unique terms not typically found outside the arena of commercial real estate lending, and often mis-used by practitioners within the industry, as well as those bumping up against CRE lending in their respective tangential industries, e.g., CRE real estate licensees, escrow officers, and surveyors, appraisers, etc. A couple of the offenders are “term sheet” and “commitment letter”. I come across borrowers regularly who are in escrow and think they have, or will, secure a loan as soon as they get a term sheet, aka, letter...
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TO REFINANCE OR NOT TO REFINANCE, THAT IS THE QUESTION
Perhaps a better question is HOW to refinance. This week the Fed (FOMC) stayed the course as advertised, raising their Fed Funds rate another 25 bps, their 8th ¼ point increase since late 2015. This takes Fed Funds to 2.00-2.25% range, and Prime to 5.25%. In their public announcement following the Wednesday meeting they reiterated (couched in language as only the Fed can do … a lexicon termed “Fed Speak”) that a December ¼ point is anticipated, and 3 more bumps to follow in 2019. In discussing the current increase, they implied that this latest hike will bring interest rates...
September 29, 2018September 29, 2018
CRE LENDING NOT OVER-HEATED
The latest Senior Loan Officer Opinion Survey from the Federal Reserve offers good news for business in general, reporting that terms and conditions for loans have continued to ease. The commercial real estate (CRE) sector, though, received no such love. Banks kept commercial real estate lending standards about unchanged on balance, it said. It wrote: Regarding the levels of standards on CRE loans, domestic banks, on balance, reported that the current levels of their standards on most major categories of these loans are at the relatively tighter ends of the ranges that have prevailed since 2005. Significant and moderate net...
August 30, 2018August 30, 2018
Booming Economy Prompting Hawkish Fed Policy
June 13 the Fed raised its benchmark interest rate, the Fed Funds rate, by another ¼%. Two additional increases anticipated in Sept and Dec. The Fed’s overnight lending rate is now in a range of 1.75% to 2.00%. Citing stronger consumer spending, and a highly optimistic business community, the Fed laid out the potential for two additional rate hikes in 2018. The Fed noted strong job growth, accommodative fiscal policy and above-target inflation as reasons for continuing to normalize monetary policy over the coming months. Lending interest rates have increased in this rising rate climate. By and large, benchmark loan...
July 30, 2018November 22, 2020
COMMERCIAL LENDING UPDATE
The FOMC raised the target federal funds by 25 bps earlier this month to a range of 1.75-2.00 %, and projected a third and fourth rate hike later this year, read that to be Sept and Dec. This sending the prime rate to 5%, and jacking up variable rate loans by ¼ point. The Fed cited increased retail sales, even excluding gas station fuel sales, and unemployment remaining below 4% as cautionary indicators of increasing inflation pressures – the May core CPI inflation was at 2.2%. And what was the credit markets response to this? Not much! This was...
June 30, 2018November 22, 2020
COMMERCIAL LENDING UPDATE
Many experts have been more bullish in their approach to increases to the Federal Funds rate in 2018, forecasting a total of four rate hikes for the year. And after the administration passed tax reform at the end of last year, experts again forecasted an increase in the Federal Funds rate, saying it could cause the Fed to actually speed up rate hikes. Today however, Fed Funds futures are forecasting the chances of four rate hikes in 2018 at 37%, down from the previous 40%. This decrease in confidence for four rate hikes is due to minutes from the Federal...
May 30, 2018May 30, 2018
COMMERCIAL LENDING UPDATE
The yield on the 10-yr U.S. Treasury spiked to 3.03% two weeks ago (4-25-18), breaking a decade long downtrend. This highlights a major problem (or achieving a solution if you’re the Fed) – inflation is back. As Bloomberg noted that morning, something even more foreboding is the move in short term rates, up, which according to them, is flashing a warning signal about the economy. The increase in the 2-yr rate to 2.49% is the highest yield since 2008, along with the 1-yr rate up to 2.25%, also the highest yield in a decade. Increases in the short end of...
May 8, 2018May 8, 2018
ADVANCED ISSUES IN PROBATE AND ESTATE PLANNING
John Rapasky and Mike Green of Counsel Mortgage sponsoring the Arizona State Bar Association seminar on Advanced Issues in Probate and Estate Planning. Speaking with lawyers regarding the pros and cons of reverse mortgages, residential and commercial financing. We offer a variety of products and services, ask us how we can assist you today: Counsel Mortgage Group®, LLC www.counselmortgage.com 480-502-1000 NMLS #178927 AZ MB #0909580 CA DBO #60DBO43873 If you would like to receive the daily blogs in your email, please click here: http://bit.ly/2GgJTJh Copyright © 2018 Counsel Mortgage Group®, LLC.
May 5, 2018May 5, 2018
AIME
I am in Irvine, California today attending the first mortgage workshop for AIME, the Association of Independent Mortgage Experts. This is a group of mortgage brokers from across the country who believe the mortgage broker provides the best value and options for the customer. There are over 600 attendees at the conference. I’ve met brokers from across the nation. We all firmly believe in the mortgage broker model and are sharing ideas as to how to get the word out to the public that they should consider a mortgage broker when purchasing a home. Our compensation is fixed and we...
April 11, 2018April 11, 2018
HAPPY HOLIDAYS
For those who celebrate, Happy Easter and Passover from Counsel Mortgage Group, LLC We offer a variety of products and services, ask us how we can assist you today: Counsel Mortgage Group®, LLC www.counselmortgage.com 480-502-1000 NMLS #178927 AZ MB #0909580 CA DBO #60DBO43873 Copyright © 2018 Counsel Mortgage Group®, LLC.
April 1, 2018April 1, 2018