Real Insight. Real Estate.

Posts Tagged ‘origination’

An analysis of the housing crisis by Karl Case:

For the last few years, we have shed many tears
Living through a recession.
The economy’s broke and it’s not a joke,
When we talk of another depression.
Fifteen million without a job,
Foreclosures and banks that fail,
401K’s became 201K’s,
And everything’s up for sale.

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Editors Note: This post is the second in a three day, three person opinion on the aftermath of the Stuyvesant Town/Peter Cooper Village deal going kaput. Yesterday Dave Jacobs wrote about its effect on the capital stack. Today Rich Weidel examines the effect on the CMBS market. Tomorrow, Dave Weinstein will explore the world of risk/reward. Stay tuned and enjoy!

Stuyvesant Town, bought for $5.4 billion in 2006 is now valued at $1.8 billion. After reading that Tishman is walking away from Stuyvesant Town and the $4.4 billion of debt piled up against the property, I’m wondering if CMBS defaults are going to become the next sub-prime mortgages. Is this the bottom, or just the beginning? Will CMBS defaults rip through the structured products market? It seems that we are at a crossroads, with arguments and predictions being made both ways. Regardless of what your gut tells you, the following chart from PREI shows the problem: Read the rest of this entry »

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I recently bought a duplex both as an investment and as a place to live for the next few years. Because I intended to live there and it was less than four units, I was able to get a 96.5% loan to value, 30 year fixed rate 5.00% mortgage. I know, I was amazed as well. Uncle Sam made the deal even sweeter for me by kicking in an $8,000 first time homebuyer tax credit. From my perspective the government made this a no brainer- all I had to pay for was closing costs, because the $8,000 tax credit will cover more than my down payment. Effectively, the government guaranteed my mortgage, allowing me to borrow 96.5% at a ridiculously low rate, and then gave me the other 3.5%! This is all great and good, but under this scenario, will I stay in the house if the market continues to get worse? With a 96.5% FHA loan during a turbulent market, it would take only a small change in property values for me to find myself underwater.

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