multifamily investments: Feds pulled another $800B out of their................ - 11/25/08 04:31 PM
Feds pulled another $800B out of their ………………hat? Taxpayer hat that is.
Actually that’s not even accurate. The Fed is essentially creating the $800B first to purchase debt and then using taxpayer money to weed out the bad loans. The initial plan to purchase bad loans from banks was scrapped but has now been restructured to buy $500B worth of higher quality mortgage securities.
In addition, the Feds will purchase bundles of consumer debt, credit card debt, student loans and car loans in an attempt to free up the seemingly frozen solid credit markets.
Let’s stand back here and take a … (11 comments)
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multifamily investments: Multifamily investments standing still - 11/10/08 02:27 PM
The multifamily purchase market is almost at a standstill right now. Seems like the entire investment market has taken the rest of the year off.
A multifamily investment lender like an insurance company has basically folded their tents for the year leaving even less choices. We have two insurance companies still willing to make an investment in the sector putting very good loans on their books. I'll say that again. Very good loans.
The general consensus is the multifamily investment market is more than holding it's own in both performance and cash returns. Occupancy is up but collections are as well washing … (2 comments)
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multifamily investments: Wachovia's $24 Billion dollar mistake - 11/05/08 10:58 PM
It’s hard to feel sorry for someone who makes a $24B mistake. Wachovia’s former chief Ken Thompson was quoted as saying “It’s a dream come true” when the bank came to an agreement to buy Golden West in mid 2006.
Golden West was a well known thrift that had been around for some 20 years in the western markets. The empire was built almost solely on one product known as an “Option ARM” or “Pick a pay”. In fact, 99% of the mortgage portfolio was this one program. But they had branches and deposits that evidently blinded Thompson.
Golden … (4 comments)
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multifamily investments: Wild ride for 2009 Multifamily Investments - 11/03/08 07:07 PM
Wow, it’s been a wild ride this year so far. Multifamily investments and performance are all over the board depending on which survey you read.
One thing for sure is a real slow down in purchases most likely caused by the presidential election. Multifamily investors reap great benefits utilizing aggressive accounting strategies so any discussion among candidates about a tax increase generally slows down the purchase market.
Surveys have indicated that rents have leveled off for most areas. I think this is fair to say. It’s always more difficult to raise rents in this environment. However, demand may increase as … (2 comments)
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multifamily investments: Little bank birdie told me..... - 10/28/08 01:55 PM
I noted in a previous post, I’d like to be a fly on the wall in some of the Fed meetings. Well I wasn’t a fly, but I have found a little bank birdie who revealed some very interesting information regarding some of the Fed’s moves.
The birdie was actually a formal bank statement released to stockholders explaining their balance sheet along with insider banking knowledge of the Fannie and Freddie bailout and their bank losses as a result.
I blogged many smaller community banks were left holding the bag on Fannie and Freddie stock. In fact, they were encouraged … (0 comments)
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multifamily investments: The AMERICAN BAILOUT - 10/26/08 10:36 PM
I use a dozen or so sites to obtain information about the financial sector and in multifamily investments. I started to count the billions and billions of dollars that are being invested here and there and some more way over there.
My calculator just couldn't compute the numbers. You know it's a lot of money when you start counting trillions instead of hundreds of billions.
One analyst stated casually that one company would only require just over a $100 billion. When did we get so casual about $100 billion.
According to my calculator. I have to be honest, the numbers were … (0 comments)
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multifamily investments: Fed bailout used to buy National City? - 10/25/08 11:25 PM
Is PNC going to use some of the $700 Billion Fed money to buy National City? This may be difficult to prove but the idea is just very unsettling. There may be some good uses for this but using it to purchase another bank is just not what the doctor ordered. Nor was it in the minds of the Treasury or was it?
There have been so many historic moves and most likely moves that have never been made public. Keep an eye on the money trail and your fingers on the key board to protest the newest move by … (2 comments)
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multifamily investments: Credit crunch impacts Alabama - 10/17/08 06:25 PM
The credit crunch has hit a sector that until now hasn’t really been out there in the media’s eye. Many Small Business folks and consumers have been crushed by the credit freeze. Larger companies struggle with investors in the short term commercial paper market too scared to invest in them.
Who else could be at risk?
Well it turns out; it’s someone very close to home. And folks should pay attention to it. It turns out to be Birmingham Alabama.
Many people remember when New York City almost went broke because of mismanagement. This one is different. Sure there … (0 comments)
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multifamily investments: Wow! More historic Fed moves... - 10/14/08 12:27 PM
The Feds made yet another historic move in gathering the largest bank CEO’s to a meeting in Washington. The meeting was to go over details of the latest government move.
The Feds will purchase preferred stock in the nine largest banks and expand from there. Several of the banks were Citigroup, Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America as well as Morgan Stanley.
Not included in the statement was Goldman Sachs but I’d bet $1 that they will receive some of the initial money as well. Due to Treasury Secretary Paulson’s history with them and working … (1 comments)
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multifamily investments: Multifamily fight over Wachovia - 10/06/08 09:50 PM
The multifamily investment market is watching Wachovia, Wells Fargo, Citigroup slug it out.
The demise of Wachovia Corp has the claws out in a cat fight over the sale. Citigroup thought they had a steal, make that a DEAL in acquiring the bank.
Encourage by the Feds, Citigroup made the deal to acquire Wachovia’s banking assets for $2.16B and takeover much of Wachovia’s debt. Wachovia shareholders were apparently the victim of a misunderstanding. Much like the mortgage paperwork many borrowers signed, they must have missed the part of only $2.16B.
Wachovia was approached by Wells Fargo who offered $15B and they … (2 comments)
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multifamily investments: When Banks hoard cash....... - 09/30/08 02:22 PM
The Feds are scrambling hard these days to “save the economy”. I think that’s a fair statement to make. When the big, rich and powerful begin to lose money and fear they will lose more it really does illustrate the trickledown economics applied to Main Street. No money trickles down for anyone and my multifamily investment market along with every other market is affected even though the government is pleading with banks to part with their cash.
Actually it took me awhile to realize Main Street was me and you.
The credit market (unfortunately including my beloved Fannie … (6 comments)
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multifamily investments: Fractional Reserve Banking- what it means to you - 09/12/08 11:31 AM
A multifamily investor asked my opinion (for what it’s worth; about the same as Lehman Brothers stock) on the time table for this nightmare to end. He was the same investor who thought I was crazy in early 2007.
The quick meltdown of New Century certainly opened our eyes. There’s nothing like having a closing on a purchase and the lender’s money doesn’t show up. They were the sub prime market.
This investor and I get along great but he didn’t believe a credit crisis was looming since it hadn’t affected him. Now it has big … (0 comments)
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multifamily investments: The REAL reason for Fannie Mae's takeover - 09/11/08 11:06 AM
What was the real reason behind the Fed bailout?
The huge jump in home loans that started the housing bubble around 2003 was a result of foreign investors including governments or central banks moving into the higher paying Mortgage Backed Securities (MBS).
These same investors were previously buying Treasury Bonds with cash American consumers were sending overseas on oil and goods.
Foreign investors turned to the MBS because of higher yields and the promise of safety due to the ultimate backing of the US government. Our government’s lack of oversight may have been part of their strategy as the housing boom … (4 comments)
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multifamily investments: Multifamily impact from F/F takeover - 09/10/08 04:40 PM
It's been almost 3 business days since the takeover and the impact on multifamily investing remains unclear. Most of those in the know have not commented or provided any indication of a change in the increased multifamily funding.
The experts who keep track and rely on Fannie Mae and Freddie Mac for funding are looking for the same commitment from the new owners. Perhaps even more funding than its commitment.
The performance of the multi family investment portfolio has out paced most other real estate related sectors. Even Conduit programs were mentioned again which is good news. Conduits have virtually disappeared … (0 comments)
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multifamily investments: Lehman Brothers Holdings Inc holding nada - 09/09/08 10:29 PM
Lehman Brothers Holdings Inc with all its past billion dollar earnings and history is now holding just about zero. Actually less than zero when you begin counting the mortgage related write downs on their books.
The write downs to actual worth of the current market value of the billions of dollars worth of mortgage securities. LB like many other banks are utilizing a hocus pocus, smoke and mirrors approach to evaluating the portfolio of mortgage securities.
You can’t blame them really. Massive write downs are already creating financial havoc and estimating higher home values helps protect the rest of … (4 comments)
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multifamily investments: Multifamily Fannie Mae impact unknown - 09/08/08 12:12 PM
Reading over several articles this weekend and this morning, one item stuck out clearly for me.
The GOOD news is every American taxpayer is now a real estate investor who owns trillions of dollars worth of real estate mortgages.
The BAD news is every American taxpayer is now a real estate investor who owes trillions of dollars in mortgage debt.
The news that Fannie and Freddie Mac were place in a conservatorship was good news for the market. The term beats the heck out of calling it a bankruptcy. The Feds can go in almost any direction in making this … (4 comments)
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multifamily investments: Banks left holding Fannie's bag. - 09/07/08 09:05 PM
The Fed takeover of Fannie and Freddie came as no surprise with speculation running rampant for weeks on how not when it would happen. Many analysts felt that some sort of capitalization from the Feds would be the best approach as it would best serve the faithful investors (and speculators) who have so much at stake.
However, the bailout effectively nationalized the mortgage industry with the government taking over and becoming the top dog moving ahead of all other investment positions. Investors had paid billions to ensure their positions as preferred stockholders. How this will affect those investors remains … (6 comments)
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multifamily investments: Banks continue trying to dodge bullets - 09/05/08 10:16 AM
It’s apparent that our banks are not made of steel like superman.
The latest bullet is the HELOC. All of the major banks are reporting the highest delinquencies in more than a decade.
The biggest concern is the plunging home values of homes making a huge amount of the loans basically unsecured. Americans now have over $1 TRILLION dollars of HELOC debt on the books.
Many of the largest banks have made some move to limit the availability of credit lines by closing them. However, National City has gone one step further … (3 comments)
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multifamily investments: Hard money to the rescue? - 08/12/08 04:34 PM
Commercial loan programs in today's market have created a void making hard money programs attractive. Seems like it shouldn't be so, but hard money is making a huge come back in this environment. I'm getting several calls a week with a new hedge fund here and one there who want business.
New hard money or a more aesthetic name of "private lending" is reaching out with higher LTV's and looking for those properties that are no longer attractive to the main stream market. However, the more established hard money guys are raising their standards because business is so good. Clients … (2 comments)
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