The magnitude of the commercial real estate (CRE) downturn is a topic of intense debate. One school of thought argues that bad CRE loans could send the nation into another tailspin recession, while others say the industry has the advantage of lessons learned from the housing crisis to successfully weather the storm. New data from the Mortgage Bankers Association (MBA) Tuesday seems to support the latter. MBA has concluded that commercial and multifamily mortgages continue to have the lowest charge-off rates of any loan type.
Several appraisal organizations, representing more than 35,000 real estate appraisers, are voicing their opposition to the Home Affordable Foreclosure Alternatives (HAFA) program, set to take effect April 5, 2010. The program allows broker price opinions (BPOs) to be used to determine the value of properties to establish a minimum offer for a short sale. The trade groups argue that the use of BPOs will not protect all parties interests and is likely to open the door for fraud.
Both the House bill for financial regulatory reform and the draft Senate bill currently being debated include across-the-board risk retention provisions for home mortgages. The idea is to ensure lenders have more "skin in the game," to prevent the risky practices that ignited the housing crisis. But according to a new study by the Community Mortgage Banking Project, such mandated risk retention is "no substitute" for good underwriting and could significantly raise the cost of home mortgages.
With the buy-now attitude fading, national home price reduction levels continued to decrease this month, according to a recent report by San Francisco-based Trulia, Inc., a real estate search engine. As of March 1, 19 percent of listings on the market had experienced at least one price cut, falling 10 percent from the previous month to the lowest level since Trulia began tracking price reductions in April 2009.
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