On Friday August 8th, Standard & Poor’s followed up their Friday August 5th downgrade of U.S. Debt from AAA to AA+ with the downgrade of the debt associated with a number of other agencies including Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks to AA+. Although we believe the impact of the…
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The Effect Standard & Poor’s Downgrade will have on the Commercial Lending Market
On Friday August 5th Standard & Poor’s downgraded the credit rating on U.S. Debt from AAA to AA+, while issuing a negative outlook for the future, indicating future downgrades might be possible. While the initial reaction has largely been negative and fear has taken hold of many investors and the markets, in the long run…
Debt Ceiling Resolution Affects Commercial Loans
Today the world is breathing a sigh of relief that the debt ceiling crisis was resolved yesterday, and the U.S. Treasury was able to meet all of its debt obligations. However, that feeling of debt relief is surely going to be short lasting. Although there was no doubt a default by the U.S. Government in…
Fannie Mae & Freddie Mac To Reduce Loan Sizes
Come this fall many residential mortgage markets in the United States are going to see the maximum loan sizes available through Fannie Mae and Freddie Mac reduce. Right now the maximum loan available in the highest price markets is $729,750, and this is set to reduce to $625,500 in those markets this fall. Right now…
Home Values Effect Commercial Loan Market
The June Standard & Poor’s report of the Case-Shiller Home Price Index tracking April 2011 home values indicated the first increase in values since July of 2010. Although the increase was only a modest 0.7%, it was seen by some as a positive sign. However, after seasonal adjustments were taken into account, it appears values…
Deleveraging America – Commercial Loan Meltdown
A large driver in the current economic crisis has been the amount of debt consumers and businesses have obtained over the last decade; debt which in total was approaching three times the national GDP. Unfortunately from 2010 to 2011 the total household debt in the United States actually increased to $11.5 trillion, roughly a $33…
Bank Regulations Are Restricting Commercial Lending
On June 7th at the International Monetary Conference Jamie Dimon, CEO of JPMorgan Chase, commented following a Ben Bernake speech that Bank regulations were restricting growth. Having worked in commercial banking for more than fifteen years, and currently working with over 70 different lending sources, many of which are traditional banks, I can attest first…
Moody's Downgrade of Bank Debt Would Effect Commercial Loan Rates
Due to a lack of on-going government support, and increased regulatory requirements and scrutiny, Moody’s has indicated it might downgrade the debt ratings of Bank of America, Citigroup, and Wells Fargo. Although on the surface a downgrade of debt ratings for the three largest US Banks may not seem to impact the consumer; the truth…
Home Values Continue Their Fall - Impacting Investment Real Estate Lending
On Tuesday May 31st the S&P Case-Shiller Home Price Index fell again, showing signs of continued downward pressure on home prices. The index is down roughly 33% since July of 2006 and below the previous low set two years ago. This continued downward spiral in prices is putting additional pressure on Banks already struggling with…
Is your Bank safe?
On 4/29/2011 the FDIC took over and sold five banks, one in Michigan and two in each Florida and Georgia. Five Banks in one day is the most recently. It appears Bank closures are heating back up and an increased level of Bank foreclosures will continue through most of 2011.