Browse Tag: credit unions

Latest NAR Commercial Podcast From Bill Armstrong

Picture of NAR Treasurer Bill Armstrong
Bill Armstrong, NAR Treasurer

The latest podcast on NAR Commercial Real Estate issues from Treasurer Bill Armstrong covers:

Market Improvement

The Commercial Real Estate 2Q Market Suvey shows market is stable and even improving in some areas of country.  The survey provides an overview of market performance, sales and rental transactions.

Top Obstacle: Lending VS. Recovery

REALTOR®s define financing as the biggest obstacle in the marketplace now, followed closely by pricing.  Despite these challenges, 7 in 10 commercial REALTORS® clsoed sales transactions during the second quarter.   Sales volume grew 12% from a year ago and leasing activity is up 4% from pervious quarter.
This dovetals with May’s CRE Lending Survey; 75% mentioned lending standards are as stringent as or more stringent than a year ago.  Adding to tight underwriting, down payment conditions also require hefty commitment; 72% of closed sales required a down payment above 20% to secure financing.

NAR Advocacy For Commercial Is Ongoing: FASB, Basel III, EB-5 Visas

Bill mentioned NAR is advocating for better lease accounting rules that will enable increased borrowing. NAR’s efforts have resulted in the FASB and IASB reexamining the potential economic outcomes of their proposed rule that would force many companies to capitalize commercial leases on to their balance sheets.

This month, NAR regulators to study potential impact on real estate of international capital and liquidity requirements for banks known as Basel III that require them to hold more capital back rather than making it available to lend.  While their goals are commendable, said Armstrong,  NAR supports efforts to ensure that Basel III foes not reduce liquidity.

This month, NAR joined a broader coalition of  of real estate organizations asking Congress to support legislation that would re-authorize the EB-5 Visa.  This provides visas to individuals overseas who invest in commercial enterprises and ceate jobs in targeted areas across the us.

NAR continues to push for legislation to increase liquidity in other ways. including raising the lending cap on credit unions.  Also by creating a covered bond market and supporting the extension of the SBA’s commercial refi loan program, set to expire on September 27.

NAR Code Of Ethics Training Due December 31st; Centennial of COE in ’13

Bill reminded us to not forget that 2012 is also the year to complete NAR Code Of Ethics training, which comes up every four years.  You have until December 31st to complete it. NAR’s COE is one of the things that truly sets REALTORS® apart from other real estate licesnsees.   Asked Bill: “How many of you have done your training? I have and it’s pretty painless.” You can do the training thru your local association or online at realtor.org.

2013 also marks Centennial of NAR’s Code Of Ethics. The celebration of the centennial will kick off at the NAR Annual Conference and Expo, Nov 9-12 in Orlando. The celebration will continue  through 2013.

Photo credit: MackintoshRealtors.Com

 

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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