A lot of capital chasing commercial real estate deals has led to a relaxation in underwriting standards, according to panelists at a session on underwriting quality at the MBA's commercial real estate finance convention in San Diego."It's an efficient market, and it's working right now," said Susan Branscome, a principal with Q10 Triad Capital Advisors, adding that she is seeing a reduced emphasis on equity in deals. Conduits have become more aggressive in the last couple of years, and the life companies have followed suit to keep up, Ms. Branscome said. Michael Bellissimo, chief underwriter at Arbor Commercial Mortgage, predicted that there may be "some hiccups" when it comes time to refinance the loans. Michael Gerdes, a senior credit officer/vice president at Moody's Investors Service, observed that the rating agency is seeing more non-stabilized assets that used to be the domain of equity investors. Collateralized debt obligations and commercial mortgage-backed securities avenues are efficient financing vehicles, and that efficiency has allowed originators to search out new property types, he said. All this "fishing" has led to a deterioration in fundamentals, he says.
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The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
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In a Senate hearing, Director Sandra Thompson said a raise to the required income threshold provided to affordable housing was on the table, while housing regulators also faced questions related to property insurance hikes and title insurance waivers.
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The nonpayment rate for non-qualified mortgages is up 21 basis points from February and 134 basis points from March 2023, Morningstar DBRS said.
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The government mortgage-bond guarantor will require additional information on foreclosure prevention actions, and retire some forbearance reporting.
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But views are split, at least in the near-term on whether rising mortgage rates are holding back the Spring home purchase season.
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The top five producers had an average dollar volume of FHA loans of more than $50 million in 2023.
April 18