Commercial/Multifamily News |
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Top National News |
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Mortgage Workers: Keep, Cut or Transfer
American Banker (11/04/09) P. 1; Berry, Kate
The expected decline in mortgage lending in 2010 is forcing lenders to make tough staffing decisions, considering a jump in interest rates could drive down volume and make the cost of keeping employees prohibitive; or layoffs could occur as rates unexpectedly drop, leaving them understaffed for an surge in loan applications. The Mortgage Bankers Association expects originations to decline to $1.1 trillion-$1.5 trillion, from $2.6 trillion this year, but the figure does not factor in a extension of the home buyer tax credit. Lenders may avoid layoffs by transferring underwriters, title reviewers and other production employees to their servicing arms to help process requests for loan workouts.
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FHA Digging Out After Loans Sour
Wall Street Journal (11/04/09) P. A2; Timiraos, Nick
The Federal Housing Administration, hit hard by its efforts to refinance thousands of borrowers with marginal credit out of subprime loans, now expects defaults on 24 percent and 20 percent of all loans insured in 2007 and 2008, respectively. The FHA has since tightened its credit standards for its program and forcing out lenders it believes took advantage of the agency. Meanwhile, the findings of the FHA's annual audit to be released in November will show that the projected value of its reserves has fallen below a federally mandated level, which could mean the agency may need taxpayer support for the first time in its 75-year existence.
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Construction Market to Increase 11 Percent in 2010, Says McGraw-Hill Construction Outlook Report
Realty Times (11/04/09) Mosca, Peter L.
McGraw-Hill Construction's 2010 Construction Outlook projects that construction starts next year will increase 11 percent to $466.2 billion, following a 25 percent decline forecast for 2009. According to the report, the gain will largely result from broader expansion for public works and improvement for housing from extremely low levels. Single-family housing for the new year will rise 32 percent in dollars and 30 percent in number of units, while multifamily housing is expected to improve 16 percent in dollars and 14 percent in units. By contrast, commercial buildings are anticipated to decrease 4 percent in terms of dollars after a 43 percent plunge this year.
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Fed Likely to Keep Key Interest Rate at Record Low
Associated Press (11/04/09) Aversa, Jeannine
Hoping to spur consumer spending and help economic recovery gain solid footing, Federal Reserve policymakers likely will leave a key interest rate at a record low when they wrap up their latest session on Nov. 4. A lingering concern is trouble in the commercial property market, where problem loans are mounting and contributing to bank failures. Consequently, the central bank is widely expected to keep the target range for its bank lending rate at zero to 0.25 percent. Commercial banks' prime lending rate -- used to peg interest on everything from home equity loans to some credit cards -- would then remain at about 3.25 percent, the lowest in decades.
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Small Business Gets Breaks in House Financial-Overhaul Bill
Wall Street Journal (11/04/09) P. A5; Scannell, Kara; Paletta, Damian; Solomon, Deborah; et al.
House lawmakers are considering bills that would benefit small businesses with regard to financial regulatory reform. One measure approved by the House Financial Services Committee exempts thousands of community banks and others with fewer than $10 billion in assets from oversight by the proposed Consumer Financial Protection Agency, while a Nov. 3 vote excludes small public firms from complying with part of the Sarbanes-Oxley law passed in 2002 following a string of corporate scandals.
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Residential Finance News |
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Survey: Corporate Directors Feeling Heat on Risk
Nearly double the number of corporate directors said they believe their risk as a director has increased during the past 12 months, a survey from PricewaterhouseCoopers said.
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Refis Rebound in MBA Weekly Survey
Mortgage application activity, led by a rebound in refinancings and a drop in key interest rates, increased last week, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending October 30.
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Commercial/Multifamily News |
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Earlier CMBS Vintages 'Susceptible' to Fundamental Distress
Commercial mortgage-backed securities vintages prior to 2006 face potential distress from tight credit and further deteriorating commercial real estate fundamentals.
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Commercial Briefs
A majority of surveyed commercial real estate investors, brokers and property owners expect further property value declines--11 percent to 20 percent--before bottoming out in 2010 or later.
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DealMaker of the Day
NorthMarq Capital Inc., Minneapolis, arranged more than $38.9 million for resort, industrial self-storage, retail, industrial and mixed-use office properties in Massachusetts, Maryland, Virginia, South Dakota and Minnesota and Colorado.
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QuoteLink
"Production appears to be benefiting from the continuing strength in new orders, while the improvement in employment is due to some callbacks and opportunities for temporary workers. Overall, it appears that inventories are balanced and that manufacturing is in a sustainable recovery mode."
--Norbert Ore, chair of the Institute for Supply Management.
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