Trends Since THE Bailout

So the bailout happened and nothing changed in term of availability of capital. More to the point the financial market got worth and even a country, Iceland, is going bankrupt. In addition, banks are continuing to tighten their landing practices. Citi just cut its wholesale division.

On the hard money front this means that more and more borrowers are coming our way. This week we have seen a significant increase in demand for loan from investors. Until now numerous investors were buying residential properties using conventional bank financing as long as they were qualifying. The maximum limit was to buy 10 residential properties. Starting this week the number moved from 10 to 4 properties. While this will cost increase investment costs for investors, it seems to make sense.

With the stock market going down private investors have less capital available. In addition, there is a significant increase in demand for private money. This means that to qualify to get private money the financing need to be stronger than before. Borrowers can not believe that they have much room to negotiate financing terms. Yes there are hard money lenders however, we are all becoming more and more conservative.

The new reality is lenders are in the driving seat. If you have a financing approved take it as tomorrow the loan may not be available.