26. December 2011 by admin.

In an attempt to make the Home Affordable Refinance Program (HARP) more accessible in its second incarnation, government-controlled GSE Fannie Mae is no longer requiring borrowers to demonstrate that they can repay their home loans in order to refinance them[1]. The caveat was removed from the borrower-vetting criteria because lenders have argued that it is preventing them from refinancing loans through the HARP program. The lenders have been refusing refinance options because “the lack of clarity on what ‘reasonable ability’ precisely means could expose [them] to indemnification liability in the event that the loan defaults.” The removal of the clause will allow lenders to look more narrowly at the amount owed and the number of payments to be made rather than factoring in other facets of a borrower’s finances.

However, the changes to HARP may not be good news for everyone. For example. while Bank of America responded to the changes by affirming “strong support” for HARP, BofA investors could suffer because the prepayments triggered by refinancing can put a dent in returns on investments[2]. The Federal Housing Finance Agency (FHFA) projects that the number of participants refinancing through HARP could double in the next year alone thanks to the changes in qualification standards.

Isn’t this how we got in trouble in the first place?  When lenders put through loans that borrowers could not repay?  What do you think?

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14. December 2011 by admin.

According to Grubb & Ellis research, the national market will absorb 110 million sq. ft. of space this year, up from 34 million sq. ft. a year ago

Industrial Real Estate Rallies  

Jones Lang LaSalle reports that transaction volume for industrial real estate is up year-over-year and that $17.8 billion in deals were made in the third quarter of 2011. Analysts expect this high level of activity to continue through 2012 as more sellers come into the market. Much of the deal-making will continue to be made by large institutional owners in large distribution markets, but activity is expected to be bolstered by healthy activity in second-tier markets by investors seeking value. Slowed construction and decreased availability have stoked demand for industrial real estate, making this year’s third quarter the strongest  since…   read more

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