July 24, 2014

New Lenders Enter Property Market and Think Small

A new group of lenders has begun to target properties valued at $10 million and less, and that is good news for mom and pop landlords and small-business owners.

Lenders, including ones controlled by asset managers Waterfall Asset Management, Guggenheim Partners LLC and Sabal Financial Group LLC, have launched new programs this year focusing on loans to smaller properties. Many banks and other lenders have been avoiding smaller deals since the financial crisis because they can be riskier than larger properties, and the underwriting costs are high relative to their size.

But now lenders are paying them more attention as the economy improves and loans are seen as less risky. Also, with less competition among lenders for these deals, interest rates and potential profit can be higher.

After sputtering for years, the commercial-property market for small properties is “starting to percolate,” said

Randy Fuchs,

principal of Boxwood Means Inc., a commercial-property analytics firm.

One beneficiary of this trend is BKM Capital Partners, an Irvine, Calif.-based investment company that turned to ReadyCap Commercial LLC for a $4.6 million loan this year to buy Hayden Island Business Park, a Portland, Ore., industrial property. ReadyCap is a unit of Sutherland Asset Management Corp., a real-estate investment trust managed by Waterfall.

Brett Turner,

director of acquisitions for BKM, said ReadyCap was able to offer terms that banks wouldn’t, such as limiting lender recourse in case of default. Banks wanted stricter terms, including full recourse to the lender because of the property’s worn condition and vacant space, Mr. Turner said.

ReadyCap expects to quintuple volume to $1.25 billion by 2016 by making real-estate loans to investors and small businesses under a U.S. Small Business Administration program, said

Tom Capasse,

chief executive of Sutherland. The loans are “for the small manufacturer in the Midwest or an eight-unit, multifamily owner in Encino who has been left behind,” he said.

Lenders made $176 billion in loans of $5 million or less last year, a 75% rise from 2010, Boxwood said. The pace has slowed to $36 billion in the first three months of this year, but some of the newer entrants expect volume will increase as they address pockets that haven’t been able to meet still-tight bank-lending guidelines.

While large deals involving trophy properties get most of the headlines, many real-estate markets depend just as much on debt financing being available for the buying, selling and refinancing of stand-alone doctor offices and restaurants, and cheaper apartment complexes. Loans on small or less expensive properties represent about 15% of the $3.2 trillion in commercial real-estate debt outstanding, according to Mr. Capasse’s estimates.

Partly because debt financing has been tight, prices of small commercial properties as of April have climbed 7% from their low in January 2012, according to a Boxwood Means index. In comparison, prices for larger properties have gained more than 27% in the same period and 54% from their bottom two years earlier, according to the Moody’s/RCA Core Commercial Property Price Index, which covers transactions averaging $22 million.

Before the financial crisis, most loans to smaller properties were made by commercial banks that held the loans or lenders that packaged the loans into securities that were sold to investors. Commercial banks have been ramping up lending since 2010 but have been mindful of stiffer regulations.

Lenders not overseen by bank regulators, such as ReadyCap and Guggenheim, also are returning to smaller loans. Before 2008, at least a dozen nonbank lenders funded some $26 billion of commercial real-estate debt to small properties by selling asset-backed securities, which typically contained riskier and more customized loans than traditional commercial mortgage bonds. The asset-backed market for newly originated, smaller commercial real-estate loans has been frozen since the crisis, but will likely be revived with a bond backed by ReadyCap loans in coming months, said Mr. Capasse.

Meanwhile, lenders such as Guggenheim and


Wells Fargo



WFC -0.04%



Wells Fargo Co.


U.S.: NYSE


$51.33


-0.02
-0.04%



July 23, 2014 4:00 pm


Volume (Delayed 15m)
:
8.97M



AFTER HOURS



$51.35


+0.02
+0.04%


July 23, 2014 7:58 pm


Volume (Delayed 15m)
:
139,977




P/E Ratio
12.49

Market Cap
$269.58 Billion


Dividend Yield
2.73%

Rev. per Employee
$331,888









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Co., which have focused on larger and more standardized loans for commercial mortgage-backed securities, have made a push into smaller properties. Wells Fargo, which started a program for $1 million to $10 million loans in 2011, said its volume has increased, while Guggenheim launched a similar effort this month.

Freedom Mortgage Corp., a residential lender in Mount Laurel, N.J., last year launched a lending division for commercial mortgage-bond loans up to $10 million.

In the market for larger loans, lenders are taking profits of less than 1% to win deals, down from 2% or 3% two years ago, said

Chris Haynes,

president of Broadacre Financial, a commercial real-estate finance adviser. Smaller loans can still produce more than 2% profit, though lenders must close more in a short period to make them worthwhile, Mr. Haynes said.

Write to Al Yoon at albert.yoon@wsj.com

Article source: http://online.wsj.com/articles/new-lenders-enter-property-market-and-think-small-1406056658?mod=residential_real_estate

A Power Surge in the Rust Belt

The $90 million facility would house GE workers.
Rule Joy Trammell + Rubio


General Electric Co.



GE -0.42%



General Electric Co.


U.S.: NYSE


$25.91


-0.11
-0.42%



July 23, 2014 4:00 pm


Volume (Delayed 15m)
:
31.62M



AFTER HOURS



$25.88


-0.03
-0.12%


July 23, 2014 7:58 pm


Volume (Delayed 15m)
:
443,023




P/E Ratio
18.07

Market Cap
$260.92 Billion


Dividend Yield
3.40%

Rev. per Employee
$472,222









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is about to strengthen its ties to downtown Cincinnati in the latest sign that urban centers in the Rust Belt are becoming more attractive to U.S. corporations.

The company’s link to Cincinnati dates back to 1948 when GE took over an abandoned aircraft-engine factory near the city. About 10 GE facilities now are located in the region, including the aviation unit that employed

Jeff Immelt‘s

father for nearly four decades. The future chief executive grew up in the city and was captain of the Finneytown High School football and basketball teams.

But almost all of the GE jobs in the Cincinnati region have been in suburban locations.

Now that is changing. General Electric in late June cut a deal with county and city officials to move a number of operations—including human resources and finance—to a new $90 million downtown facility on the banks of the Ohio River.

The 338,000 square-foot building is expected to bring at least 1,500 new jobs to Cincinnati. Atlanta-based real-estate firms Carter and the Dawson Co. have been given the nod to build it in a project named “The Banks” between the two stadiums that house the city’s professional baseball and football teams, the Reds and Bengals.

Part of Cincinnati’s appeal was the large package of city, county and state tax breaks and other incentives, estimated at more than $100 million over the next 15 years.

But GE executives say they opted for Cincinnati as opposed to more-suburban locations partly because young talent increasingly prefers urban living. The Banks project “has been designed to provide all of the amenities necessary to attract and retain top talent,” said Joe Allen, who will manage the new GE center.

The renaissance of downtowns, of course, has been most pronounced in places such as New York, San Francisco, Chicago and Washington. But the themes driving many of those revivals—such as the emergence of new technology and startup businesses and the growing appeal of downtown living—also are playing out in smaller U.S. cities with varying degrees of success.

“To take a firm as old as GE, to see these firms start to say that the centers of cities are the preferred location is big news,” said Robert Lang, an urban-planning expert and director of Brookings Mountain West.

And it could be a signal to other smaller cities, too, said

Patrick Phillips,

CEO of the Urban Land Institute, a land-use think tank: “If this can happen in Cincinnati, it can happen anywhere.”

Cincinnati’s downtown revival has been progressing, slowly, for years. The downtown’s population has doubled in the past decade to more than 13,500, according to a report by Downtown Cincinnati Inc. More than 1,200 residential units are expected to be added by 2017, and restaurants and retail establishments are popping up downtown.

But the city has faced setbacks, too. In 2011, Chiquita Brands International Inc. announced it would move its headquarters from Cincinnati to Charlotte, N.C., taking with it 400 high-paying jobs.

Cincinnati also is still car-dependent. A 3.6-mile streetcar line that will connect downtown isn’t expected to open until 2016.

Planning for The Banks began about 15 years ago. Developers and city planners envisioned a mixed-use development on the 18-acre site with apartments, hotels, retail and office space. The total price tag is about $800 million.

The project has inched forward and is now in the second of at least eight phases. To date, 300 apartment units have been completed, most of which are rented, and more than 90,000 square feet of retail space that is over 90% leased.

The next phases are expected to take another seven to eight years to build. Tom Gabelman, a local attorney who has served as the county’s counsel on the project since 1997, said he hopes the GE deal will help build interest from tenants and investors.

General Electric considered two nearby suburban locations for the facility—one in Mason, Ohio, and one in Oakley, about 15 minutes outside of downtown Cincinnati.

Company officials say they are hoping the downtown location will help it attract and retain talent. Cincinnati is close to higher-education institutions like the University of Cincinnati and Xavier University, a growing restaurant scene and expanding public-transportation options.

“It wouldn’t have been the type of place I would have expected [GE] to go 10 years ago, maybe even five years ago,” Mr. Phillips said. “We’re seeing neighborhoods like this are increasingly competitive as locations.”

Article source: http://online.wsj.com/articles/general-electric-strengthens-ties-to-cincinnati-1406069795?mod=residential_real_estate

Maine Hotel Raises the Bar

The Top of the East bar is one reason nearly half of the hotel’s revenue comes from food-and-beverage sales.
John Bellinis

From the 15th floor of the new Westin hotel in Portland, Maine, the highest point in the city, the view looks pretty good for a pair of hotel investors who completely remade the nearly century-old property.

Rockbridge Capital and New Castle Hotels Resorts purchased the Eastland Park Hotel in 2011 in a distressed sale for $6.9 million, according to city records. They acquired the dilapidated redbrick building with a rich history: It has hosted four presidents, including Bill Clinton, and aviator Charles Lindbergh stayed there after returning to the U.S. from his famous solo flight to Paris from New York.

The hotel has changed hands and flags numerous times over the decades and the new owners felt it required a complete makeover after years of neglect. After a $50 million gut renovation that closed the Eastland for more than a year, it reopened in December as the 289-room Westin Portland Harborview. “It’s virtually a brand new hotel in an old shell,” says

Bruce Wennerstrom,

the general manager.

Under the new owners, occupancy has been averaging around mid 60% this year, compared with low to mid 50% the last year it was open, Newcastle said. Last week, occupancy was 95%.

But perhaps the most noticeable change is the rooftop bar, known as the Top of the East, which offers panoramic views that on a clear day run as far as Mount Washington, about 80 miles away in New Hampshire.

The new owners doubled the size of the low-lit lounge, which offers snacks such as smoked swordfish bellies and panko-crusted goat cheese, to 2,000 square feet by incorporating areas that had been part of the roof.

New Castle President

Gerry Chase

is projecting revenue this year from the bar at $1.2 million, which would be more than double what it was before the renovation. April brought sales of $130,000, compared with previous years when that month had revenue of $15,000 or less, he says.

The bar’s success is one reason the hotel’s food-and-beverage revenue accounts for nearly half the property’s overall revenue, Mr. Chase says.

The hotel’s strategy runs counter to the current industry wisdom that food-and-beverage is a loss leader, better to be outsourced or scaled down. Many hoteliers prefer to lease their food space to a professional chef, or replace full-scale restaurants with a deli or “grab and go” option that is much cheaper to manage.

“Running a restaurant is not a core competency for most hotel companies,” says Smedes Rose, a hotel analyst for Evercore Partners.

The Portland Westin, which reopened with about 90 additional rooms, is part of a modest hotel revival in the Pine Tree State. A Courtyard by Marriott and Hyatt Place also began operating in Portland last month. A 109-room boutique hotel is set to open next year in a building previously occupied by the Portland Press Herald newspaper.

All told, that amounts to a 21% increase in Portland hotel rooms to 2,649, according to

Greg Dugal,

chief executive of the Maine Innkeepers Association. During the colder months, these properties may find it challenging to fill all the new rooms, he says.

But he adds Portland’s burgeoning culinary scene is driving a new wave of tourists during the warmer months that are seeking rack of goat or locally raised lamb. Portland occupancy rates exceeded 80% in July and August last year, and June’s average daily rate this year of $120.19 was a new high for the month, according to STR Inc.

The Eastland initially opened in 1927 during Prohibition, which meant that the guests taking in sun on the roof were officially drinking nothing stronger than tea. The hotel famously turned away first lady Eleanor Roosevelt and her dog Fala in 1946 because of a no-pet policy.

A fire in 1981 destroyed the ballroom, which the new owners rebuilt to host 300 people for dinner. They also renovated 15,000 square feet of meeting space to draw business travelers.

Write to Craig Karmin at craig.karmin@wsj.com

Article source: http://online.wsj.com/articles/maine-hotel-raises-the-bar-1406070044?mod=residential_real_estate

CIT Group to buy OneWest; Thoughts on Non-QM products; Recent Changes in FHA, VA, & HECM

Captain
Obvious likes to say, “Home prices don’t always go up.” It’s probably a
cliché at this point, but it’s better than the, “Buy as much home as
you can afford” of the ’00′s. Both phrases deserve to be in the Mortgage
Banking Hall of Fame (right next to “Wall St. meets Main St.”),
however, with the purchase market on many people’s business agendas this
year I was interested to read Zillow’s Defining the Riskiest Markets for Home Purchases in which their analysts set out to look at the issue of home appreciation in the United States over the last 35 years. The
housing markets with the highest percentage of negative five-year
returns are Hartford (37 percent risk of loss), Providence (32 percent),
Riverside (31 percent), Boston (30 percent) and Los Angeles (29
percent). The five least risky metro areas by the same metric are
Buffalo, Pittsburgh, Louisville-Jefferson County, Raleigh, and Nashville
(all less than 10%).”

“Five
years ago, after the mortgage market had imploded, a group of investors
– including the billionaire hedge fund managers George Soros and John
A. Paulson – banded together to create a new bank from the wreckage of
the failed California lender IndyMac. Now those investors are set for a big payday, thanks to the CIT Group, a lender that itself ran into trouble after the housing bust. On Tuesday, CIT said it would acquire the bank that rose from IndyMac’s ashes – OneWest – paying $3.4 billion in cash and stock to its hedge fund and private equity owners.”

Yesterday the commentary discussed risk. As a few readers pointed out, another big topic out there is RESPA-TILA reform
– and the MBA is on it. “The deadline for RESPA-TILA compliance is just
over a year away. Don’t be lulled into false confidence that you have
enough time to comply if you haven’t started to plan yet. RESPA-TILA is a
huge rule and will impact your business from the time a borrower walks
through the door to closing, and your business is going to need to make
deep operational changes to comply. To help the mortgage industry get
ready, MBA is on the road this summer with top-level legal, compliance
and technology experts – including a CFPB representative. So far they
have brought together hundreds of industry professionals in two states.
There are just two workshops remaining
– Atlanta on July 31st and Washington, D.C. on August 7th. The cost for
this one-day intensive workshop is low, but space is limited.

Here is a note that I received, very similar in nature to others of late. “What have you heard about companies like Redwood rolling out a non-QM product?” There are plenty of companies offering non-QM products. Check out Mortgageelements
and select “non-QM” for your state if you don’t believe me. It is not a
stretch at all to believe that the folks at Redwood Trust and others
wouldn’t roll something out at some point. (For Redwood-specific info,
ask your rep.) Remember that “non-QM” encompasses many definitions.
Is it only a DTI stretch? Perhaps interest-only product similar to what
Chase is already buying through its correspondent channel. Is a balloon
involved, or underwriting the ARM loan based on the start rate versus
the fully indexed rate? Has the industry forgotten what compensating
factors are? There are plenty of areas that lenders can advance into –
many of which they were buying prior to January 10th
and the loans are performing just fine. And I am sure that if Redwood
rolls something out, just like the other investors and lenders, the
loans had better meet the Ability to Repay rules!

As a reminder, the FHA published a
Mortgagee Letter outlining guidance that prohibits “misleading or
deceptive” advertising
and marketing for lenders participating in its
Home Equity Conversion Mortgage program. The guidance in Mortgagee Letter 2014-10
is intended to protect HECM borrowers from misleading advertising and
presentations that appear to limit their options rather than informing
them of the full range of available HECM offerings. “Senior borrowers
deserve freedom of choice when considering whether a reverse mortgage is
appropriate for them,” said FHA Commissioner Carol Galante. “This
guidance is intended to make sure lenders know we’re keeping a watchful
eye on their marketing and advertising practices that might steer
borrowers toward reverse mortgage options that limit their available
choices.”

The
Mortgage Letter requires FHA-approved lenders to explain in “clear,
consistent language” all requirements and features of the HECM program
and may not mislead or otherwise cause a senior borrower to believe that
the HECM product contains any features or limitations that are
inconsistent with FHA’s requirements. “Lenders are prohibited from using
any misleading or misrepresentative advertising or marketing materials
in connection with the HECM program or from making any statement or
representation that could mislead a mortgagor as to his or her rights
under a HECM,” the letter said.

Texas has proposed amendments to its Home Equity Lending Interpretations. Early this month in the Texas Register,
the Finance Commission of Texas and the Texas Credit Union Commission
jointly proposed amendments to the term “interest”, and its use, in home
equity lending interpretations in the Texas Administrative Code.

Everyone
knows that regular loans pay off early, but HECMs do as well, and many
decisions are based upon Principle Limit Factors (PLF) associated with
reverse mortgages.
Principal limits on the HECM reverse mortgages are defined based on the
PLF tables that are published by HUD. The HECM Mortgagee Letter
announcing the PLFs came out. “As is done periodically, HUD re-evaluated
the entire PLF Table for HECM loans. The subsequent revisions announced
with the Mortgagee Letter considered the need for PLFs for
non-borrowing spouses below the age of 62 and a prudent re-balancing of
PLFs to properly manage risk. Mortgagee Letter 2014-12 more fully
describes circumstances under which mortgagees ensure that mortgagors
are given the information they need to make informed choices. Overall,
these HECM policy changes support FHA’s mission to expand sustainable
mortgage financing options for seniors and create a sustainable HECM
program into the future. Review Mortgagee Letter: 2014-12.
The updates to its PLF tables included factors for borrower ages down
to 18 years. While this update to the PLF tables was motivated by the
recent changes announced by FHA regarding the treatment of non-borrower
spouses, it is interesting to see that PLFs have actually increased for
borrowers over a certain age. The new principal limits favor older
borrowers (80yrs), who are likely to witness an increase in
principal limits of about 8-12%, compared with around 4% for those under
the age of 80.

From CMG Financial, veteran LO Guy Schwartz answers the question, “Can a Veteran have two VA loans at the same time?”
“With FHA you may have a second loan if you are moving for a job
related reason (more than 50 miles). FHA and VA guidelines overlap in
many areas and we thought this may be one… It depends on two factors.
The two factors are a) does the veteran have any entitlement left (in-depth examples of VA entitlement),
and b) does the move make sense, is the veteran being transferred, are
they moving closer to their place of employment, etc.? These reasons
make total sense.  Reminder, FHA and VA require 25% equity in the
current home (75% LTV) in the current principal residence in order to
offset the PITI with rent. Conventional loans require 30% equity (70%
LTV).

And the percent of VA loans is increasing per this article in Bloomberg.
The VA’s share of new mortgages is at a 20 year high and in the first
quarter of 2014 accounted for 8.1% (just under $20 billion). Last year,
VA’s share in Q1 was 6.9% and 10 years ago it was under 2%. The record
was 28% in 1947, as one would expect as WWII troops found their
financial footing and the building boom began.

Providing
GNMA with data? Then you’ll want to either look at its recent posting,
or forward it along to someone who does….Ginnie Mae has provided a
reminder of upcoming Data Disclosure file changes on the Data Disclosure
Download page. These changes are applicable point forward from the 1st Date Applied date. The complete list can be found here.

Ginnie Mae has added “MBS Liquidated and Terminated Loans Disclosure Layout.” To view the complete bulletin: GNMA bulletin

FHA
recently updated HECM Reasonable Diligence Timeframe Extensions. All
content information can be viewed in the bulletin FHA INFO #14-34. HUD

Ginnie Mae has added “Addition of CSV Loan Level download files on the MBS and HMBS Search Pages.” To view the bulletin: Ginnie Mae

Franklin American Mortgage Company
updated its VA Qualified Mortgage policy specific to IRRL loans. In
order for an IRRL to be exempt from the income verification under ATR/QM
provisions under TILA, the total QM points and fees on the loan must
not exceed 3% of the principal loan amount of the new loan amount.
Additionally, FAMC Correspondent National Bulletin 2014-21
includes updates on Conventional Refinance Transactions, Sourcing Large
Deposits, Conforming Fixed 97, Rent Loss, Tax Return Signatures,
Homeownership Counseling Disclosure, VA Rate/Term Cash Back, USDA
Properties with Outbuildings, Clarification on Conventional Assets, FHA
Manual Underwriting and Manual Downgrade Policy, Flood Zone
Determination and Reminder on LDP/GSA Documentation.

First Community Mortgage
shared information regarding VA’s policy clarification on unallowable
fees. If the Lender charges the full 1% maximum allowable origination
fee, they cannot charge unallowable fees.

Mountain West Financial Wholesale
has made changes to 203k Rehab Loan, High Balance are now available.
Effective July 14, 2014, FHA High Balance loan limits are available for
both the 203(k) Standard (FF30KF), and 203(k) Streamline (FF30KS)
programs.

You all know this, but as a reminder FHA
has extended the re-certification deadlines; the vast majority of the
problems impacting lender recertification functions have been addressed.
While some isolated issues specific to particular lenders are still
being investigated, lenders should be actively attempting to complete
their re-certifications Deadlines.

FHA mortgagee review board posted administrative actions.

Alright,
enough new and old news – let’s take a look at this downright boring
bond market. We did have some potentially market-moving news yesterday.
In fact, bonds
were just slightly higher after dealing with a tame consumer inflation
reading (CPI +.3%, about as expected) and some fading of the
geo-political, flight-to-safety trade. On a year-over-year basis, the
headline CPI was up 2.1%, matching the May number, but up from 1.1% in
February. The Core was up 1.9%, down from the 2% in May and up from 1.6%
in February. Inflation has been on the rise and will be closely watched
by the Fed.

In
housing news, the Federal Housing Finance Agency (FHFA) reported that
its Home Price Index rose by 0.4% in May, while the year-over-year
number was up 5.5%.  The FHFA House Price Index (HPI) is calculated
using home sales price information from mortgages either sold to or
guaranteed by Fannie Mae and Freddie Mac.  The price appreciation
numbers have been falling in recent months and are coming back to more
normal levels.

But for numbers, by the end of Tuesday we were about where we were Monday, which is about where we were on Friday… The 10-yr, which yesterday ended at a yield of 2.47%, this morning is at 2.46% and agency MBS prices are better by about .125.

Jobs

Prospect Mortgage is looking to acquire small to large mortgage lenders.
“As a top 5 non-bank retail lender in the purchase-money market,
management has created a national platform that supports retail LOs and
their Realtor partners. Prospect is known for the synergy that exists
between its sales and operations teams. Supporting Realtor partners in
closing on time is the number one company goal. This purchase focus has
positioned Prospect to win in the new “post-refi” mortgage market. If
you’re looking for an exit strategy, need a succession plan while
remaining entrepreneurial, or want to preserve your hard-earned equity
and stay in the game, talk to Prospect. Let them show you how to keep
growing your business and take your risk off the table.” Contact John Manglardi for more information.

Article source: http://www.mortgagenewsdaily.com/channels/pipelinepress/07232014-cit-group-and-onewest-bank.aspx

MBS RECAP: Bond Markets Lose Ground After Strong Start; MBS Underperform

Although MBS did a good job of pushing back against a recent bout of underperformance over the past 3 sessions, today showed it won’t be a straight shot.  In other words, MBS had closed the gap to Treasuries somewhat since Friday, but it widened again today.  This was ultimately only exceptionally noticeable compared to yesterday. 

When viewed against the backdrop of the past 5 days, nothing too troubling is going on between Treasuries and MBS, and nothing that can’t be explained.  Such an explanation would included elevated supply from MBS originators as well as geopolitical risk having a more direct effect on Treasuries.

Both sides of the market started out in stronger territory today thanks to bond-market-friendly comments from the Bank of England–essentially the only market mover of note overnight.  At 10am, European bonds bounced at their best levels and domestic equities began improving.  Treasuries and MBS followed those moves by embarking on a selling spree that was moderate, but pervasive.  By the close, trading levels remained well-within the week’s existing range on all accounts.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/380189.aspx

Mortgage Rates Back up to Unchanged After Stronger Start

Mortgage rates were mixed today depending on the lender and the time of day you look.  Most recently, the average lender is back to unchanged vs yesterday.  Before that, most lenders were in slightly better shape, but market weakness prompted widespread reprices.  On an individual basis, some lenders are slightly higher or lower, especially if they didn’t reprice with the rest of the market. 

4.125% remains the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios.  Any changes in quotes from yesterday would only affect the closing costs, and even then, they’d be minimal. In addition to being unchanged this week, rates continue to hold an exceptionally narrow long term range as well.  Rates have held between 4.125 and 4.25 for well over 2 months.  It continues to be the case that next week’s busy calendar of important economic events stands the best chance to break the monotony.  Until that happens, both risk AND reward for locking or floating remain lower than normal.  That said, if you choose to float, make sure to set a line in the sand somewhere at slightly higher rates where you’ll cut your losses and lock if the market moves against you. 

 

Loan Originator Perspective

“So, even thought the bias has been to some improvement in pricing we’ve
been hanging around these levels for awhile now. This hints at a lack
of conviction by the markets to want to move lower perhaps looking for
some stronger impetus and direction. That may come next week with the
end of the month lead up to the all important Jobs Report on Friday,
August 1st. I would be inclined to lock if I was within 15 days of
closing to protect against a bounce higher. For longer lock periods,
check your tolerance for risk and keep in close touch with your mortgage
professional.”  Hugh W. Page, Sen. Mortgage Consultant, Capital Partners Mortgage

“I continue to favor locking here following the old, lock the lows, float
the highs. Yields have not been able to break convincingly below 2.47
on the benchmark 10 year note. ” -Victor Burek, Open Mortgage

 

Today’s Best-Execution Rates

  • 30YR FIXED - 4.125
  • FHA/VA – 3.75%
  • 15 YEAR FIXED -  3.375%
  • 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

  • The hallmark of 2014 so far has been a disconcertingly narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets have punished that imbalance with a paradoxical move lower.

  • As of June, rates were officially lower year-over-year, but that’s due to rates’ path higher in 2013.  The current path in 2014 remains sideways. 

  • European markets continue to play a nagging role in the background, generally helping rates in the US remain lower than they otherwise might be. 

  • From a wider point of view, we’re in limbo, waiting for the first significant move away from the narrow range.  A rally into late May stood a chance to act as this break, but rates have since returned to what were previously the lower limits of the 2014 range.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

Article source: http://www.mortgagenewsdaily.com/consumer_rates/380187.aspx

Prime Wheel Corp Acquires Compton Industrial for $15M


Prime Wheel Corporation acquired the industrial building at 250 W. Apra St. in Compton, CA from The Prudential Insurance Company of America for approximately $14.97 million, or $100 per square foot.

The 149,654-square-foot warehouse was built in 1979 on 5.9 acres in the Compton West Industrial submarket of Los Angeles County. It features four loading docks and nine drive-ins, 21-foot clear heights, 2,000-amp heavy power, and a fenced lot.

Warren Noack, Kimberly Noack, and Travis Noack with NAI Capital represented the buyer. The seller handled the deal in-house.

Please see CoStar COMPS #3046691 for more information on this transaction.

Article source: http://www.costar.com/News/Article/Prime-Wheel-Corp-Acquires-Compton-Industrial-for-$15M/162425?ref=/News/Article/Prime-Wheel-Corp-Acquires-Compton-Industrial-for-$15M/162425&src=rss

Universal Music Renews 200,000 SF Lease in Santa Monica


Universal Music executed a 10-year lease renewal for 201,006 square feet at 2220 Colorado Ave. in Santa Monica, CA.

The property was built in 1999 in one of the most in-demand submarkets of Los Angeles. Gensler will be renovating the space for Universal to create a more modern, open floor plan. The building is equipped with high ceilings and water scapes, 24-hour security and access control, and private balconies and patios with ocean and mountain views.

UMG Signs Record Lease in Woodland Hills

Brad Feld and Chris Keller of Madison Partners represented the landlord, Clarion Partners. Paul Stockwell and Josh Leibowitz of CBRE represented Universal Music.

Article source: http://www.costar.com/News/Article/Universal-Music-Renews-200000-SF-Lease-in-Santa-Monica/162302?ref=/News/Article/Universal-Music-Renews-200000-SF-Lease-in-Santa-Monica/162302&src=rss

517 Wilson Plaza Trades Hands in Glendale


Western Imperial 2000 LLC sold the 517 Wilson Plaza office building at 517 E. Wilson Ave. in Glendale, CA for $5.6 million, or about $252 per square foot. The new owner will occupy 55 percent of the property.

The two-story, 22,260-square-foot office building was constructed in 1983 in the Glendale Office submarket of Los Angeles County.

Krich Adary of Hall Chambers represented both the buyer and the seller in the sale.

Please see CoStar COMPS #3061949 for more information on this transaction.

Article source: http://www.costar.com/News/Article/517-Wilson-Plaza-Trades-Hands-in-Glendale/162362?ref=/News/Article/517-Wilson-Plaza-Trades-Hands-in-Glendale/162362&src=rss

Family Home From the Turn of the 19th Century

  • Price: $3,415,880
  • Location: Tunbridge Wells, United Kingdom

Set in about 12 acres, this seven-bedroom Edwardian house in East Sussex, England, has retained its original features, including ornamental fireplaces. —Javier Espinoza

Article source: http://online.wsj.com/articles/europe-house-of-the-day-family-home-from-the-turn-of-the-19th-century-photos-1406026335?mod=residential_real_estate