ReNJGal Says:
July 11th, 2007 at 5:16 pm
John, how are they not the “real” Hamptons? I consider everything out in that general area “the Hamptons” unless it’s way far out like Montauk or North Fork.

When Joe6P can’t get a decent home loan…or gets blown out of a first home purchase because of qualification issues, everything that needs to be understood about subprime MBS downgrades will be perfectly front-and-center in the public consciousness.

You don’t need to understand the intricacies of the process to know that a bunch of Wall Street yahoos- trying to spin turds into gold- have screwed up your ability to put a roof over your head.

When this stuff finally makes the cover of Time…or gets shared on a “very special” edition of Oprah, all it will mean is that it’s time to buy again.

Fitch Sees Rising Shakiness
In Commercial Mortgage Arena
By RYAN CHITTUM and JENNIFER S. FORSYTH
July 12, 2007

Defaults on loans backing commercial mortgage-backed securities could soon begin to rise, as some owners of buildings purchased for high prices find they were too optimistic about future market conditions, a credit-rating company warned.

In a report yesterday, Fitch Ratings said the fervid lending conditions from 2005 until early this year allowed landlords and real-estate developers to load up on interest-only loans and loans with high loan-to-value ratios that were underwritten with expectations for rent increases that appear “unrealistic.” While commercial rents are rising at the fastest levels in many years — especially in some of the strongest commercial markets, including New York and Washington — Fitch said owners have “overly optimistic expectations of future rental rates, sales growth and market growth.”

The warning comes as investors have become more cautious about financing these deals. In the last three months, lenders have pulled back somewhat, tightened covenants and required borrowers to put up more cash. Meanwhile, interest rates have risen, making it harder to use borrowed money to amplify returns. “It’s clearly had an effect on the number of people chasing deals,” said Colin Dyer, chief executive of Jones Lang LaSalle Inc., a Chicago commercial real-estate services company. “It’s taking deals longer to get completed, and it’s stopped price growth for now.”

As investing in commercial real estate has surged this decade and sales prices have skyrocketed, lenders competed aggressively to win market share. Some loans used so-called negative leverage — when a buyer’s debt payment is more than the income the property produces. In the past, banks underwrote loans based on current cash flow — typically the rents landlords receive from tenants. As the market heated up and banks competed against each other to produce loans, some began underwriting loans based on expected future income levels.

Even though lenders have turned skittish in recent months and have started to require more equity in transactions, the higher risk loans that were written previously are now working their way into pools of loans packaged into commercial mortgage-back securities — thus, raising the likelihood of higher defaults for the rest of 2007, said Fitch.

Some of these riskier loans, especially in the white-hot Manhattan office market had been based on the current pace of rent increases-about 25% in the past 12 months in Manhattan — continuing for 10 years or more. “It was not just one bank doing this,” Britt Johnson, a senior director at the ratings agency and a co-author of the report. “It was a common practice across originators.”

While I’m on record as saying that this board is not a proxy for the collective mind of the buying public, it sure is helpful to get a sampling from what is- at the very least- the most vocal and demonstrative portion of the contingent. I can’t help my sellers sell if I don’t see things thru the eyes of a buyer.

I’d come here daily for that alone.

Thanks

At least one or two a day. Literally. And not potential good ideas…practical, immediately do-able ones.

That’s why I keep coming back.

If your purchase was large and its worth your time to pursue this, you should consider following the consumerist.com approach of handling corporate stupidity and kick your complaint up the management chain of command. See

http://consumerist.com/consumer/complaint-letters/how-to-launch-an-executive-email-carpet-bomb-259713.php

A good friend of mine got good results doing this with an (expensive) problem he had with Best Buy. Other consumerist readers have had positive experiences with this as well, the following is an example of it with Office Depot

http://consumerist.com/consumer/happy-endings/office-depot-executive-e+mail-carpet-bomb-scores-direct-hit-264500.php

“Burgdorff, at least, has the meetings, and all their realtors are required to attend.”

Most traditional companies do have weekly meetings. That’s where they brainwash the sheeple, cross-sell affinity services, impart sales techniques that would make Willy Loman blush and generally teach agents how to fail. Then they all gorge on cheap, empty white carbs, pile into cars and caravan the new listings for the week. By the time that’s all over, the day is pretty much shot. That’s why these companies never require their 1 or 2 good agents to attend.

What is your point here? Most everything you detest about RE agency gets taught in these meetings.

Any RE office meeting that occurs more than once a year, doesn’t involve good, strong drinks and doesn’t revolve around a few simple ideas that both help customers and make money for the agent is no more than a brainwashing session.

Not unless you are a realor. The MLS is not a public databse. Even the realtors on this site might not be able to confirm the home sales in your area since you are in New York.