Mortgage Banking

There used to be three main lenders for apartment loans in the $500,000 to $3M: WaMu, Countrywide and World Savings. Any apartment loans in the size range not done by the top 3 were handled by local banks, a few life insurance companies, several CMBS lenders and Fannie Mae’s small loan program.

Countrywide is no lending for the foreseeable future. WaMu is tentatively lending and World Savings (which is owned by Wachovia) has slowed its production. This leaves more apartment owners looking to those other lenders for new avenues of financing.

Michael McQuaid, a local Seattle Apartment broker recently posted his insights on the subject. Check out his post in its entirety here. Below are some highlights, all of which I agree with:

• The typical client… went to [WaMu, World Savings, or Countrywide] because anyone else was at least one-half percent higher on the rate with total fees 3X to get the loan.
• We should anticipate much longer processing times and much more expensive loans as the “new” lenders are going to insist on several third party reports that we have not had to supply to the previous three sources.
  
• Environmental reports, structural reports, and surveys will be necessary and rates will be higher, meaning loan amounts will be lower as well.

the appetites of lenders are changing daily. Check here frequently to follow the lending markets volatility.