Though it was pronounced dead-before-arrival by opponents on Capitol Hill, President Barack Obama’s new mortgage refinancing package contained far more than legislative proposals.
In fact, significant portions of it that have received little media coverage require no prior approval from a hyperpartisan Congress, and could begin affecting consumers within weeks. [more]
Despite the historically low interest rates, commercial owners worldwide may face significant hurdles refinancing in the coming year, the Wall Street Journal reported. And most of the five-year mortgages used for commercial properties when the boom was at its height will be coming due next year.
For instance, a venture that includes Goldman Sachs’ Whitehall funds has a $203 million mortgage on the Park Central Hotel, at 870 Seventh Avenue between 55th and 56th streets, that matured in November, the Journal said. Despite being current on the mortgage, the group was unable to refinance, and is asking the lender to accept a discounted payoff on the loan, according to real estate analytics firm Trepp, which also shows the mortgage as delinquent.
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From left: Sheldon Solow and 9 West 57th StreetDeveloper Sheldon Solow has obtained a $625 million loan on 9 West 57th Street from Deutsche Bank, which beat out AIG and JPMorgan Chase to provide financing for the trophy property, Bloomberg News reported.
The loan refinances debt set to mature in February that Solow took out at the height of the bubble in 2007. About $55 billion of property loans are set to come due in 2012, and $19 billion of them were originated at the height of the bubble. But most of them will struggle to refinance, Standard & Poor’s predicted, as property values have decreased about 42 percent from the peak.
In this case, several parties competed for Solow’s refinancing because of the location and prestige of the building, exemplifying the demand for prime buildings, Bloomberg said. [more]
Even assets with healthy performance are struggling to refinance in this tough credit market, the Wall Street Journal reports.
For instance, after three one-year extensions, the Westin New York in the Times at Times Square is looking to refinance its $232 million mortgage. And although the 863-room hotel, developed by Tishman Hotel and Realty, can report 90 percent occupancy, according to real estate analytics firm Trepp, the servicer transferred responsibility to a loan workout specialist this past Friday. [more]
Federal Reserve Governor Elizabeth Duke is calling for a more aggressive approach to rescuing the housing market by allowing more homeowners to refinance and by converting some foreclosures into rental housing, the Wall Street Journal reported. “Clearly the market is not functioning as it should,” she said in a speech Thursday in Washington.
Duke advised that policy makers should improve upon an already-existing White House initiative designed to facilitate more refinancing of loans guaranteed by government-supported mortgage firms Fannie Mae and Freddie Mac, the Journal said. Allowing more homeowners to take advantage of low interest rates would bolster the weak U.S. economic recovery, she said. [more]
Mortgage applications decreased 5 percent for the week ending July 22, according to weekly data from the Mortgage Bankers Association. Refinancing also decreased 5.5 percent from the previous week.
The refinance share of mortgage activity decreased to 69.6 percent of total applications from 70.1 percent the previous week. The adjustable-rate mortgage share of activity increased to 6.1 percent from 5.8 percent of total applications from the previous week.
— Miranda Neubauer [more]
Could I refinance you into a seven-year fixed-rate mortgage at 2.99 percent? Or how about 10 or 15
years fixed in the mid-3s?
These may sound suspiciously like teaser quotes with tricks in the fine print, but they are in fact signs of
an important shift under way among American homeowners: Not only have they been refinancing at a
robust pace in recent weeks, but they’re ratcheting down on the remaining number of years they plan to
pay on their mortgages.
Freddie Mac chief economist Frank Nothaft calls the shift to shorter terms “a very strong trend.” [more]
While most people who took out mortgages during the financial crisis
got hit with high interest rates, an increasing number of these borrowers are now
looking to refinance into lower-rate mortgages to save money, the New
York Times reported. But for borrowers who may not want to start over
with a 30-year loan, the solution might be to refinance into a 20-year
loan. Rates on these mortgages are low enough that someone in the
third year of a 30-year loan can shave years off the payment term
without increasing the monthly payment much, if at all. By switching
to a 20-year loan, borrowers would be able to pay off their mortgages
sooner, while saving thousands of dollars in interest payments. [NYT]
An Upper East Side co-op board has managed to complete an $8.5 million refacing project, install $3 million in upgrades, and deposit $12 million into the board’s reserve fund — without raising the residents’ maintenance fee. While this sounds too good to be true, Habitat Magazine explained how the co-op board at 360 East 72nd Street refinanced its underlying mortgage to fund the approximately five-year project, which included numerous improvements, including work to the building’s chiller and elevators, on top of the brick refacing of the building’s exterior.
The rate of mortgage application filings dropped the week of Christmas and then stayed flat through the following week, according to the most recent Mortgage Bankers Association weekly survey. The week ending Dec. 25 saw a 22.8 percent decrease in the MBA index, which measures seasonally-adjusted loan application volume data. The following week, ending Jan. 1, the index stayed relatively the same, increasing just .5 percent. Refinancing accounted for nearly 70 percent of all mortgage activity for both weeks, according to the report. TRD
