Browse Tag: Credit union

NAR Treasurer Bill Armstrong Podcast: 2013 Look-Ahead


National Assciation of Realtors, Washington, D...
NAR Offices, Washington DC

NAR Treasurer Bill Armstrong’s 2013 look-ahead podcast summarizes 2012’s achievements for commercial REALTORS® while at the same time looks into the tea leaves for 2013.  The highlights:

  • Amid modestly improving commercial market fundamental, NAR expects vacancy rates to decline in all 4 major commercial sectors – office, retail, industrial, multifamily.
  • In June 2012 NAR was able to successfully gain a full year extension for the National Flood Insurance Program. This program provides access to affordable flood insurance for millions including many business owners.  It’s the culmination of a successful multiyear campaign, and means business owners will continue to have acces to the flood insurance and not be forced to take their chances in the virtually nonexistent private flood insurance market.
  • NAR made significant progress on lease accounting issues in 2012 by holding back a rules proposal from the Federal Accounting Standards Board (FASB) and the IASB.  The proposed rules would have forced the frontloading of assets and liabilities arising from lease contreacts. Ultimately, this would hurt the bottom line of many businesses, especially in commercial real estate. NAR  built a strong coalition of  other industrial organizations and we got many members of Congress to contact FASB and IASB to ask them to reconsider their proposal.  Because of NAR’s actions the two accounting boards listened and withdrew the proposed rules.  “We plan to keep ourselves in the middle of the conversation on lease accounting rules as it takes place,” said Bill
  • Because tight lending has been hurting the CRE market. NAR has been working vigorously to regularly meet on Capitol Hill to reiterate the need to increase liquidity in the marketplace  NAR continues to beat the drum and encourage new sources of capital. One example is increased lending by credit unions. Friend to NAR,  Senator Mark Udall (CO) introduced a bill will increase the cap on credit union member business lending from 12.25% to 27.5% percent of total assets for well-capitalized credit unions. NAR will continue to urge the switft passage of this legislation.

What can NAR commercial members expect in 2013? NAR action in the following areas and more:

  • Bill said lease accounting rules could be taken up again in this year’s second quarter.
  • Congress may also vote to extend the Transaction Account Guarnatee Program for two years.  This program will help to increase liquidity available to community banks.

2012 also brought exciting new member benefits, said Bill.

  • In November,  we saw the launch of the RPR Commercial application.  “I truly believe it is a valuable benefit for our members. It gives REALTORS and only REALTORS an edge when viewing and searching properties, viewing property detail, analyzing markets and creating reports for your clients all in one place. I urge you to see it all for yourself at blog.narrrpr.com/commercial.”
  • 2012 marked NAR’s new partnership with Xceligent “This will provide a suite of commercial real estate info services and preferred pricing exclusively for NAR members.  For the first time, REALTORS in the commercial sector will have a prowerful alternative to when it comes to how you research and market properties.
  • 2012 saw the merger of the REALTORS Federal Credit Union with Northwest Federal Credit Union. They offer vitral banking, plus access to 4600 brick-and-mortar service centers and thousands of  ATMs nationwide.  They have money to lend at extremely comepetitive rates for owner-occupied CRE.  To join online today go to realtorsfcu.org

 

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NAR’s Yun: Credit Unions Trying To Pick Up Commercial Credit Slack

NAR’s Chief Economist and Senior VP of Research Lawrence Yun notes the National Credit Union Association’s piece suggesting that credit unions are trying to pick up the slack left by our pinstriped friends the banks in the commercial credit market:

Commercial real estate loans are very difficult to obtain. The lack of government backing (outside of multifamily mortgages) and a higher capital charge on office, retail, industrial, and other commercial real estate-related mortgages have severely hindered credit flow and potential business deals. Moreover, the compliance costs related to the Dodd-Frank bill and the uncertainty regarding Basel III rules are said to be too burdensome for smaller independent community banks from lending on modest-sized loans. Large banks have enough legal staff to handle the compliance, but small banks do not.

A survey of REALTORS® who specialize in commercial real estate showed that many traditionally have relied on small local lenders. Furthermore, most deals were in the amount of less than $1 million. In other words, REALTORS® who specialize in commercial real estate were predominately helping local small businesses start a new business by getting that lease or purchasing a building. But with commercial credit barely flowing from traditional sources of small independent community banks, REALTORS® and clients were forced to turn to the big banks and the accompanying bureaucracy. The big banks, partly as a result, are getting bigger while smaller-sized banks are getting squeezed, which should not be viewed as a healthy development for competition and customer care.

But one recent sparkling spot among smaller-sized lenders is that credit unions have begun to provide more loans. NAR had actively pushed for raising the amount the credit unions would be permitted to lend on commercial real estate. The latest data from the National Credit Union Administration showed the total loan amount rising to $582 billion, at an annualized rate of 3.6 percent, the largest single quarter increase in four years. Given some anecdotal stories of commercial REALTOR® members having a better chance of securing a loan from credit unions, those who had been shut out from traditional lenders should at least inquire with credit unions.

 

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Flood Insurance, Small Business Credit Help And More: NAR Commercial 2011 Legislative Wrap Up

Washington dc

NAR 2012 Treasurer Bill Armstrong’s podcast wrapping up the year in legislative issues for REALTORS® touched on a series of important issues affecting commercial real estate. Podcasts are great (I like to listen in the car), but when the issues include far-reaching legislation, it’s important to break out and take a closer look at the content in text – to make it visible to readers and in the search engines.  So let’s break it out:

  • NFIP Flood Insurance:  The House and Senate recently signed off on a second short-term extension (through December 16th 2011) to the National Flood Insurance Program.  This benefits both commercial and residential real estate practitioners.  That means there’s been no lapse in the NFIP authority to issue flood insurance.  Bill also mentioned that NAR will continue to urge Congress to pass a five-year extension, and reminded REALTORS to respond to NAR’s call to action in support of the NFIP extension at realtoractioncenter.com 
  • FHA Mortgage Loan Limits: Congress restored a two year extension to FHA mortgage loan limits. Through 2013, the limit stands at 125% of local area median home prices. “While that doesn’t impact commercial real estate directly, our industry depends on a thriving workforce and housing market, so this is an issue that all commercial practitioners will benefit from”, said Armstrong.
  • Credit Union Member Business Lending Bill: The House Financial Services Subcommittee held a hearing after NAR’s support for this idea.    This bill impacts commercial practtcioners by raising the cap on credit union member business lending lending from 12.15% to 27.5% of total assets (for well-capitalized credit unions). This allows more capital to be available to struggling small businesses occupying commercial buildings. “NAR will continue to engage Congress and other stakeholders to push for a raise of the business lending cap for credit unions,” said Armstrong.
  • As part of the Small Business Jobs and Credit Act of 2010, NAR was able to help create a new commercial refinance program implemented by the Small Business Administration.  This allows small businesses to refinance certain owner-occupied commercial real esatte loans.  The new refi option was initially restricted to small businesses with CRE mortages maturing by end of 2012.  After extensive NAR lobbying, small business borrowers will be allowed to refinance certain CRE loans maturing after that date.
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