This week I received the CoStar Report and one paragraph caught my attention…as buyers and sellers have asked me recently what will be the effect on commercial real estate transactions….this kind of sums it up:
To address risky lending practices, banks will be required to set aside additional capital to cover potential losses, and certain securities will no longer be acceptable as vehicles for capital reserves held by large banks. Banks also will be required to retain at least 5% of a loan on their books as “skin in the game” if the loan is sold and/or repackaged with other loans and securitized. Some relatively low-risk mortgages — for example, fully documented loans with fixed interest rates — are exempted under the law.
So, sellers must be prepared to present all appropriate financial info on the property being sold, and buyers prior investment record will be looked at closely…..just a sign of the times for all.
www.ronlargent.com ronlargent@kw.com
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