Mortgage Market Dead
Author: Barry Stein - President, Rohman & Stein Associates Inc. 3/28/17
Helping your clients navigate the right financing while positioning them for opportunities in this consolidating and ever - changing market is as important as helping them find the perfect property.
To further muddy the waters this doesn't even begin to address the greater government intrusion and bank regulators placing additional stress on lenders such as varying underwriting standards (increasing stress analysis) increased regulatory and administrative oversight requiring higher loan loss reserves, thus adding tremendous costs to lenders. When regulators start to tell professional loan officers how to underwrite loans, this cannot be good.
Yes, lenders today are still making loans albeit on a much more conservative time consuming (sometimes painful) restrictive basis.
In today's market the loan to values are lower, the debt service coverage ratios are higher, particularly with stressing risk analysis, including looking at income in place; thus reducing reliance on future cash flows, i.e.discounted cash flow models.
Almost anything in this economic environment having to do with a nail and hammer is becoming scarce for conventional type lending.
In today's Real Estate environment, the borrower needs to be sensitive to the lenders concerns, political and economic, as well as there own.
However through all the struggles and pain, there will be opportunities that will arise. Lenders will continue to lend to quality borrowers and well thought out projects.