PROPERTY LOANS: Finding the Right Lender
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PROPERTY LOANS:  Finding the Right Lender
Selected articles & opinions of interest to help borrowers & their advisers find the right lender.
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Union Bank expands Commercial Real Estate lending with deal

Union Bank expands commercial real estate lending with deal

Union Bank said Monday that its purchase of a $3.7 billion commercial real estate loan portfolio expands its lending platform in the East Coast.

The San Francisco bank purchased the New York-based lending division from PB Capital.


"This is an important strategic acquisition for Union Bank, as it leverages our established CRE capabilities by adding a national origination platform and strong relationships with top-tier property owners," said Masashi Oka, president and CEO of Union Bank, which is owned by Mitsubishi UFJ Financial Group.


Monday's deal gives the $97 billion Union Bank the ability to originate and service institutional commercial real estate loans on a national platform.  Read full article

LoanInterchange's insight:

Union bank is saying they are expanding their commercial lending to a national platform -- another possibility for commercial property borrowers; More to come on their programs, terms, loan sizes.   

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Stearns Lending Soars at Record Pace for Loan Originations in 2012 | Business Wire

Stearns Lending Soars at Record Pace for Loan Originations in 2012 | Business Wire | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

Stearns Lending, Inc., a leading nationwide mortgage lending institution set a company record by funding $11.8 billion in 2012. This was a 107 percent increase in volume from 2011. Stearns Lending origination platform operates 17 regional operations centers nationwide and is licensed in 49 states. Stearns' rapidly growing loan servicing portfolio ended the year just under $9 billion.


Stearns also had a record year in recruiting by hiring an additional 546 employees throughout 2012 and now employs approximately 1,400 staff members nationwide. Read full article

LoanInterchange's insight:

Another residential lender who doubled their 2012 loan origination volume and has hired new staff to originate loans.   

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Pacific Mercantile Takes Hit from Loan Channel Exit

Pacific Mercantile Takes Hit from Loan Channel Exit | PROPERTY LOANS:  Finding the Right Lender | Scoop.it
Low yields and the short-term impact of a strategy shift involving its departure from an origination channel weighed on Pacific Mercantile Bancorp in the first quarter.


....later in the article: 


 Steve Buster, Pacific Mercantile's chief executive, said in a news release that "the bank embarked on a new strategy in the fourth quarter of 2012, a strategy we are now putting into play by refocusing the bank, moving from disposing of problem loans and a workout management style" to improving the bank's lending to businesses, including companies in the import-export and entertainment industries.  Read full article

LoanInterchange's insight:

A takeaway that might help borrowers and their advisers is this lender says they are actively looking fo lend to businesses in the import-export and entertainment industries.  A possible lead if you are looking for funding in these areas.      

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Real Estate Web Searches Climb 253% in Four Years as 90% of Homebuyers Use Internet as Primary Research

Real Estate Web Searches Climb 253% in Four Years as 90% of Homebuyers Use Internet as Primary Research | PROPERTY LOANS:  Finding the Right Lender | Scoop.it
Home-shopping consumers are not only exponentially increasing their reliance on the Internet but are also developing distinct patterns for using it in their housing searches.

That shopping is no longer about showing up in a store or a broker's office or open house to get information is something Google calls the Zero Moment of Truth or ZMOT.  Google says "the sales funnel isn't really a funnel anymore," instead there is a generation that does its homework ahead of time. They shop in traditional ways; watching or reading ads, walk into stores to look at products, talks to friends, check styles and prices but alternate these with digital sources.  They watch "how-to" videos on You Tube, read product and service reviews, look up specific brands on search engines, and even research on the go with smart phones and tablets. Read full article

LoanInterchange's insight:

Rather than displacing real estate agents, the Internet is actually helping them connect with home buyers.   Ditto for mortgages.  We welcome mortgage loan officers, advisers & brokers to use the LI platform to reach out to lenders  faster & more conveniently.  

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Most Americans Still in Dire Need for Credit Education

Most Americans Still in Dire Need for Credit Education | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

New findings reveal a large number of Americans still know little about credit scoresindicating lenders have to amplify their financial education efforts as the mortgage market focus switches from servicing to originations.

Roughly one-quarter of a representative sample of 1,022 adult Americans participating in a survey conducted by the Consumer Federation of America and VantageScore Solutions “incorrectly answered wide-ranging questions” about basic credit score related issues.

For example, anywhere from 40% to 42% of participants do not know that credit card issuers and mortgage lenders use credit scores as their primary risk measure when they approve or disapprove a borrower credit request and assign pricing.  Read full article

LoanInterchange's insight:

40-42%!  Seems both high and dissappointing!   Wondering .... if the same survey was conducted with folks actively in the market to buy/finance a new home, if the number of people who know that lenders use credit scores as a risk measure would be substantially lower.  

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Mezzanine Debt or Financing

Mezzanine Debt or Financing | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

One definition of mezzanine is a low-ceilinged story or floor between two main stories of a building.  As a term, it is most often used for the lower balcony that sits directly above the floor seats but below the upper balconies.   Mezzanine debt is a form of financing that sits between equity and debt, thus borrowing from the definition of a mezzanine structure to apply to a company’s financial structure.   Who actually came up with the term “Mezzanine Debt” is anyone’s guess, though maybe it was a bright financial analyst who was also an avid theatre fan.

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Applying with more than one lender

Does anyone know if there are any issues with applying for a loan with more then one lender?

I currently have put in a loan application with a bank and a mortgage broker. I have locked rates with both. Both have done an appraisal and a title search. We are scheduled to close on our house in less than 60 days.

Both bank and mortgage broker have things that I like and do not like about their mortgages. I have found another mortgage lender that I really like, and like ALL the features of their loans. I believe I can lock at a rate that is the same as what I have with my current applications.

Other than losing my application fees, is there anything else to consider when shopping around? Could my credit score be affected by having too many mortgage loan applications out there?

Thanks for any help!


ANSWER: Shopping for rates and loan terms is a good idea. Working with two banks on one property – and to the point that they have ordered appraisals and are scheduling closings – is just bad business. You need to chose your lender before you commit. Your lender is going to need to be compensated for title searches, appraisal fees and other closing costs whether you close with them or not. This is a matter you need to handle right away.

LoanInterchange's insight:

Shop early, shop broadly, commit once. 

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5 reasons to refinance your mortgage

5 reasons to refinance your mortgage | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

Written by Holly Johnson.


A few weeks ago, I wrote about how I refinanced my mortgage for the second time in a year. The second refinance wasn’t actually part of my master plan, but I ended up having to refinance in order to remove my private mortgage insurance. And although refinancing our home again proved to be a huge pain, we are now saving $135 per month by no longer paying private mortgage insurance premiums. Thankfully, we managed to secure a “no cost” refinance that only cost us in time and effort. It’s a huge relief that it’s finally over with, and I am fairly hopeful that this is the last time we will ever have to refinance.


Refinancing has its perks

Luckily, I am no stranger to the benefits of refinancing. Not only did we refinance our primary residence, but we also refinanced our two rental homes within the past 18 months. We did so in order to take advantage of record low interest rates and to shorten the terms of their loans. Now that we have refinanced our rental properties, they will be paid off much faster. In fact, our two rental properties are due to be paid off in about 13 years. Once they are completely paid off, we will then have another (somewhat) passive income stream and will be that much closer to our lifetime dream of early retirement. Read full article


LoanInterchange's insight:

Always more interesting with real life examples. Thank you "Get Rich Slowly"  

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1 in 3 U.S. Counties Are Losing People, Census Data Show -- AOL Real Estate

1 in 3 U.S. Counties Are Losing People, Census Data Show -- AOL Real Estate | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

A record number of U.S. counties -- more than 1 in 3 -- are now dying off, hit by an aging population and weakened local economies that are spurring young adults to seek jobs and build families elsewhere. New 2012 Census estimates released Thursday highlight the population shifts as the U.S. encounters its most sluggish growth levels since the Great Depression.  Read full article

LoanInterchange's insight:

Lenders have strong preferences to write new loans in growing local economies.  If borrowers or their advisers can provide evidence that your loan request is for a property in the midst of a growing local economy, it could help.    

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Zero down mortgages making a comeback? - AGBeat

Zero down mortgages making a comeback? - AGBeat | PROPERTY LOANS:  Finding the Right Lender | Scoop.it
Zero down mortgages are blamed by some for contributing to the downfall of housing, but some lenders are not requiring a down payment.
Zero down mortgages – controversial and real

Before the recession, zero down mortgages were somewhat common, particularly for first time buyers, and bandit signs lined the roads proclaiming the ease with which anyone could get a loan. True or false, many believe the relaxed lending conditions played a substantial role in the housing crash, and lenders have responded over the years by tightening qualification criteria to the point that even the National Association of Realtors (NAR) warned late in 2012 that the housing recovery would be hindered by overly tight conditions.

Now, zero down mortgages are being rumored in various cities, and while not widespread, it is not heard of, for example, the DailyHerald.com reports that two credit unions are claiming success in zero down payment programs going back as far as two years with a nearly perfect track record.


So who gets zero down loans?


So what exactly are the lending conditions under which a lender may offer a zero down loan? The Herald reports that Navy Federal Credit Union, the largest credit union in the nation, offers a zero down mortgage with no mortgage insurance, even allowing seller concessions. The average loan is around $200,000 (and can go up to $1M) and targets first time buyers, and the Union has closed $740 million in this type of loan in the last year alone, keeping them in their own portfolio and servicing themselves. Qualifications include membership in the credit union, sufficient income and reserves, and decent credit. The program boasts less than a one percent delinquency rate.

Additionally, the NASA Federal Credit Union also offers zero down loans to members in the Washington D.C. area with a maximum loan amount of $650,000 and seller concessions are capped at three percent. This program is a little more stringent with qualifying criteria than the Navy FCU, with the minimum qualifying credit score around the mid-700s, but the program has had zero foreclosures.

Still a contentious issue

The topic of required down payments has been controversial and a common talking point for politicians during election periods, and it still appears likely that almost all banks require at least something down, but these two new programs are already proving that it is not an impossibility in the market to offer zero down loans, even with tight lending conditions.

LoanInterchange's insight:

Owner occupied residential is the focus of the programs above.   

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Higher 1Q Originations Do Not Offset 1st Mariner’s Asset Disposition Losses

Higher 1Q Originations Do Not Offset 1st Mariner’s Asset Disposition Losses | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

1st Mariner Bancorp saw its mortgage origination volume increase 56% in the first quarter on a year-over-year basis., contributing nearly $10 million to the company’s non-interest income during the period. 


During 1Q13, it originated nearly $721 million in residential mortgages, while application volume was $759 million. One year earlier, origination volume was $461 million and application volume was $677 million.



Marketing expenses of $442,000 and postage of $1.1 million in 1Q13 were up from $188,000 and $259,000, respectively, in 1Q12 because of the cost of direct mailings to solicit refinance and purchase mortgage customers.



Salaries and benefits increased by $1.1 million over the previous year because of the additional staff hired to meet higher mortgage origination volume.  Read full article 


LoanInterchange's insight:

An inauspicous earnings report but an industrious borrower or agent might notice the substantial increases in marketing and staff spending to originate new loans.  1st Mariner Bancorp is a community bank focused on commercial loans, headquartered in Baltimore and serves Maryland.   They look open for business.    

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SBA Loans | SBA.gov

SBA Loans | SBA.gov | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

If you’re planning to start a business or expand an existing business, you might need financing help. SBA participates in a number of loan programs designed for business owners who may have trouble qualifying for a traditional bank loan.

To start the process, you should visit a local bank or lending institution that participates in SBA programs. SBA loan applications are structured to meet SBA requirements, so that the loan is eligible for an SBA guarantee. This guarantee represents the portion of the loan that SBA will repay to the lender if you default on your loan payments.

The SBA Loan Application Checklist provides a listing of forms and documents you and your lender will need to create a loan package to submit to SBA   Read full article 

LoanInterchange's insight:

Great reference site.  If you are wanting to learn more about SBA loans - the SBA.gov site itself is a good place to start. 

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Here's What You Need To Earn To Buy A Home In 25 Cities

Here's What You Need To Earn To Buy A Home In 25 Cities | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

We won't be moving to San Francisco anytime soon.  How much salary do you need to earn in order to purchase the median-priced home in your metro area?


To find out, HSH.com took the National Association of Realtors’ 2013 first quarter data for median home prices as well as our 2013 first quarter average interest rates for 30-year, fixed-rate mortgages to decipher how much money homebuyers in 25 major metros would need to earn in order to purchase the median-priced home in their market. Read full article 

LoanInterchange's insight:

Always an interesting exercise.  Cleveland's median-home price has increased by 19 percent over the last year, however the median price of $101,000 is still the lowest on the list.  Coming in highest is San Francisco.  

 

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Lenders Are Getting Ready for Purchase Environment

Lenders Are Getting Ready for Purchase Environment | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

The smarter mortgage lenders are already preparing for the day when mortgage rates start to rise again and a business which recent data show still gets three-quarters of its new applications for refinancings will once again rely on purchase business.
Ray Brousseau, executive vice president for Carrington Mortgage Services, said the company is using a different marketing strategy this year as opposed to last. The company originates loans both retail and wholesale. In 2012, 70% of its production was in refinancings. The wholesale side in particular, he said, had a heavy refi share.
But in 2013, Carrington has made “a concerted effort to begin to shift our organization towards purchase business. Not a complicated strategy but a difficult one,” said Brousseau. That being said, it is better to start working on the relationships with purchase referral partners such as Realtors and attorneys right now, than six month from now when all originators will likely be chasing after that business. Read full article

LoanInterchange's insight:
The articles concludes “Banks are still reluctant to make loans to those with anything less than healthy credit ratings. In most cases, lenders are also looking for a 20% deposit as well.   

Basically, no change.  The marketplace for property loans is still relatively tight.



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No More Double Vision

No More Double Vision | PROPERTY LOANS:  Finding the Right Lender | Scoop.it
We re hearing that the Consumer Financial Protection Bureau will be issuing new guidance on loan officer compensation in June.


by Brian Collins and Mark Fogarty, May 10, 2013. 


The final qualified mortgage rule issued in January requires lenders to count compensation paid to loan officers towards a 3% point and fees cap along with an origination fee.


Since the issuance of the QM rule and other mortgage rules in January, the CFPB has been making adjustments to ensure the new rules don’t inhibit current levels of lending. The CFPB understands that credit is tight. And no one in Washington wants to make it any tighter. Read full article

LoanInterchange's insight:

Good update from the "What We're Hearing" column at National Mortgage News.   

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FirstREX, HomeStreet Joining Forces

FirstREX, HomeStreet Joining Forces | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

Written by Bonnie Sinook


FirstREX plans to separately fund through an equity investment up to half of the borrower’s downpayment required on a HomeStreet Banksingle-family purchase loan in return for a share of the possible future appreciation or loss of the home’s value at a point up to 30 years in the future.

San Francisco-based FirstREX said the program is expected to be available to the Pacific Northwest bank’s customers at some time in the third quarter.

If borrowers choose not to sell the home, any time during the term specified in the contract they can exit it under certain conditions, James Riccitelli, co-CEO of FirstREX, told this publication.


This would require an arm’s-length, updated appraisal and recompense of the amount FirstREX originally invested, plus any profit that the company would made if the property were sold at that appraised value.

LoanInterchange's insight:

A new program that is getting some press:  Interesting to see what % share of the profits the lender asks in return for their equity investment.  Pro-rata ?   More to come as the program's launch date comes closer.   

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10 Home Improvements That Are a Waste of Money -- AOL Real Estate

10 Home Improvements That Are a Waste of Money -- AOL Real Estate | PROPERTY LOANS:  Finding the Right Lender | Scoop.it

Want a summer home improvement project? Dig a big hole on your property, throw a bunch of money in it, throw a match in and bury it once the flames subside.

This is basically what a select, wrongheaded number of Americans do every year when they see the sun peek out in June and head to Home Depot, Lowe's or Sears without much of a plan. That yard may seem like it's begging for a pool and your front porch may look inferior to a sunroom, but that doesn't necessarily make them good ideas.

In some cases, it's never a good year to make those ideas happen. We asked those in the know which projects homeowners should stay away from this summer. The following is a list of home "improvements" in which the return on the investment is at best subjective and, at worst, a money- and time-draining waste of warm weather:  Read full article

LoanInterchange's insight:

A listing of residential improvements that add value in the eyes of potential buyers which can be at odds with the preferences of the property's owner. 

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