With mortgage-backed securities gone, lenders tell local real estate pros what it takes to qualify.

During the real estate boom, a lot of deals got done with the help of commercial mortgage-backed securities, which are pooled loans secured by the cash flow generated from stores, offices and other property. In 2007, the national market was issuing $230 billion of the popular debt financing.

This year, financing from commercial mortgage-backed securities has fallen to near zero.

What’s the impact of the loss of this option, and what’s taking its place?

The evaporation of this securitized debt hasn’t been a dominant issue in southern Maine, compared with places such as south Florida and Las Vegas, experts said Tuesday. For solid prospects, local banks are eager to help fill the void, the experts said, although at much tighter underwriting standards and with greater financial participation from borrowers.

(more…)

The state’s no-fault car insurance law went into effect Oct. 1, 1973.

Held up as a national model, the mandate was created to keep insurance rates down and ensure that a driver’s own insurer covered medical costs and lost wages quickly, no matter whose fault the accident was.

Although lawsuits were limited, motorists were entitled to lifetime medical coverage.

In years since, motorists have complained of too-high insurance premiums, and insurance companies have whined about ever-increasing medical costs.

The National Association of Insurance Commissioners found that Michigan has the 12th-highest average car insurance premium.

Currently, Michigan is one of 12 no-fault states — and it has the best medical benefits in the United States, according to the Insurance Institute of Michigan.

Found here.

Steve Gaulden has a good income, good credit and a nice house.

So when the Trinity resident took steps earlier this year to improve his family finances by locking in a stable mortgage payment, he could not have known that one of his banks would block his path.

The recession has ushered in “the new normal,” as financial experts say, causing lenders to act in abnormal ways.

Mortgage experts say some banks are refusing to refinance mortgages for some of their most reliable customers — customers with second mortgages or home equity loans — because they simply want borrowers to pay off loans and clear up shaky bank balance sheets.

Some reliable homeowners will find no relief despite their best efforts.

(more…)

North Dakota’s insurance commissioner plans to seek changes in state insurance laws to prevent any company from using domestic violence as a reason to avoid selling health insurance coverage to a woman.

A report issued last year by the National Women’s Law Center in Washington, D.C., names North Dakota as one of nine states that allow insurance companies to turn down health coverage for women who have been beaten.

Commissioner Adam Hamm said the Insurance Department had no record of any complaints from domestic violence victims in North Dakota who were denied coverage. The state’s four top health insurers, which take in about 98 percent of North Dakota’s market, said they did not consider domestic violence a pre-existing condition that would deny coverage, Hamm said.

(more…)

Tax Changes Should Give Many Borrowers More Flexibility in Working With Lenders, But Those Already Drowning In Debt May Be Out of Luck

The Internal Revenue Service last week issued eagerly awaited new guidelines that allow certain commercial mortgage borrowers to modify and restructure their securitized loans without triggering massive tax penalties. The new rules allow servicers to intervene before it’s too late and the borrower is facing loan default and foreclosure.

Previously, property owners holding performing loans who were up to date on paying their mortgage — but still needed to refinance in the face of declining rents and rising vacancies — couldn’t initiate loan restructuring or modification talks with lenders. Only those owners entering default or imminent threat of default could negotiate with servicers. Under the new rules in Revenue Procedure 2009-45 issued by the IRS and the Treasury last week, special servicers can at any time reduce the interest rate or extend the term of securitized loans held in real estate mortgage investment conduits (REMICs) and investment trusts. That flexibility allows borrowers with at-risk or distressed assets and onerous loan terms to ask for help earlier in the game. Download the IRS’s Revenue Procedure 2009-45 (PDF)

(more…)

Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.

Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors, The New York Times’s Stephen Labaton reports. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.

The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.

A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.

(more…)

Reverse mortgage of property allows retired people to get monthly payments from banks while contunuing to stay in their home. To make this unique concept popular, there is need to create more awareness, writes Suresh Nandi

Reverse Mortgage Loan (RML) scheme launched with much fanfare in 2007 by the UPA Government has failed to take off in a big way due to variety of factors. Main reason was the lack of proper packaging and information dissemination to the target group. Considering RML was described as a saviour to the growing population of senior citizens — whose number is set to rise up to 140 million by 2016 in India — is the scheme still waiting for the much needed momentum to take off.

In simple terms, RML is a loan against your home that you do not have to re-pay as long as you live in that place. The concept is new in India and it allows senior citizens to unlock the value of their most valuable asset (their home) by mortgaging it. As they keep getting money from the bank for a pre-decided period, they can continue to live in the house until death. It helps them benefit from the long-term appreciation of their house too as a tangible asset by turning it into a source of much needed funds, post-retirement.

(more…)

The U.S. program to kick-start commercial-mortgage lending has failed to produce new debt sales since it began in June, delaying efforts to revive the market for bonds tied to shopping malls, office buildings and apartments.

The fourth monthly deadline under the Federal Reserve’s Term Asset-Backed Securities Loan Facility aimed at commercial real estate is today, and no deals have emerged. The program was expanded to include newly issued commercial mortgage-backed securities to stave off a wave of foreclosures as borrowers are unable to refinance amid a pullback in lending and a 36 percent drop in property prices from their October 2007 peak.

(more…)

As an owner of a sedan company, I was dismayed by your article on hackers (“Food vs the law,” Sept. 15).

The managers of the grocery stores where hackers are operating as “courtesy drivers” either do not know or are ignoring their potential liability. Hackers operate illegally in part because they do not want to pay for commercial auto insurance as required by state law. (The Maryland Auto Insurance Fund, which provides coverage for many sedans and taxis, currently has a base rate of about $4,000 annually for such vehicles operating in Baltimore City.) The hackers have personal auto insurance and operate without the knowledge of their insurance company. However, if the driver has an accident and the insurance company learns that they were working as a for-hire driver at the time, it is a near certainty that the insurance company will deny all claims arising from the accident.

(more…)

Commercial-property sales in the U.S. this year are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s.

About $16 billion of office transactions will be completed by year-end, according to data compiled by Real Capital Analytics Inc., a New York research firm that has tracked deals for almost a decade. Real Capital Managing Director Dan Fasulo and Sam Chandan, chief economist of Real Estate Econometrics LLC, said that may be the lowest volume since at least 1991.

“There’s no real way to sugarcoat it,” Fasulo said in an interview. “A slowdown of this magnitude certainly hasn’t occurred since I’ve been in the business.”

(more…)