Archive for the ‘Interest Rates’ Category

$4.5 Billion in Nonperforming Loans, Delinquent Debt to Hit the Market

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Kennesaw’s Ashford Capital Partners’ Managing Partners Matt Riedemann brings you news you can use.

Three of the nation’s largest mortgage lenders have put sizable packages of nonperforming and reperforming mortgage loans on the market for investors to buy,according to New York-based loan broker Mission Capital Advisors.

First reported by Bloomberg, The loans are worth a combined $4.5 billion, Mission Capital said. Bank of America has put up approximately $2.56 billion worth of delinquent debt for sale, including nonperforming loans, reperforming mortgages (those in which the borrower was 90 days or more behind but has resumed making payments), and home equity lines of credit (HELOCs), according to Mission Capital. Citigroup has put up $1.8 billion worth of reperforming mortgages for sale, and JPMorgan Chase is looking for a buyer for $143 million worth of nonperforming mortgage loans, Mission Capital said. The sale was first reported by Bloomberg News.

According to Mission Capital, there has been an increased demand for delinquent mortgage loans, troubled debt, and nonperforming mortgages among hedge fund investors and private equity firms. Last month, Freddie Mac announced that it intended to sell $410 million worth of delinquent mortgage loans. But there has been so much of a demand that the suppliers cannot keep up, Mission Capital said.

“The supply has yet to meet the demand that’s out there,” Mission Capital managing director Luis Vergara said. “A lot of capital has been set aside to invest in residential product.”

Spokespeople from Citi and JPMorgan Chase declined to comment on the sale of the delinquent or nonperforming loans. A spokesperson from Bank of America said the bank did not comment on “market rumors.”

Data compiled by Mission Capital shows that about $4.2 billion worth of nonperforming loans and $3.2 billion worth of modified or reperforming loans have traded or been put up for sale so far this year.

Author: Brian Honea February 13, 2015 http://dsnews.com/news/02-13-2015/4-5-billion-in-nonperforming-loans-delinquent-debt-to-hit-the-market?utm_source=DSNews.com&utm_campaign=6128f3d2ec-Your_Daily_Dose1_28_2015&utm_medium=email&utm_term=0_1924082bfe-6128f3d2ec-175200045

Come back tomorrow to http://www.AshfordCP.com/blog  where Kennesaw’s Ashford Capital Partners’ Managing Partners Matt Riedemann brings you news you can use.

Firms of the Builder 100 Primed for Growth

The firms of the Builder 100 and Next 100 rise above the challenges of 2013

 

 

 

NAHB chief economist David Crowe notes in his “Small Vs. Large” analysis that the average NAHB single-family builder “has 10 employees, builds 27 single-family homes in a year, and has an average annual volume of $4 million.”

And—just as society has its 2 percent—so, too, does home building. Welcome to one of our crown-jewel annual projects, the Builder 100 and Next 100, compliments of the teams at organizations who produce, market, and settle on more than half of the nation’s new homes every year—a number that is growing, and, we expect, will keep growing.

The list itself and what it quantifies belie the work, the cleverness and creativity, the skills, the boldness, and the sheer force of will and resilience among the teams of people behind the titles of the 200 companies in our survey universe. We’ve profiled a few of the fastest growers on the next seven pages and provided related market data from Metrostudy, Hanley Wood’s research arm.

Last year’s primary driving mechanism was investors’ need for yield opportunity, which poured liquidity into absorbing distressed inventory in huge gulps, giving home builders two long-awaited and critical bases to work off. One was stabilized and upwardly mobile house pricing, a strong signal to discretionary buyers that the moment had come to move off the sidelines and into the pursuit of that dream home. The second was a sense of urgency, which had been absent since about the time Hurricane Katrina wreaked havoc in the Gulf in 2005. In 2013, bidding wars over properties actually broke out like hockey skirmishes that pitted potential owner-occupiers against one another and against investor buyers, and the scarcity of inventory took care of the rest.

People wanted what there wasn’t a lot of, and that played into the hands of the big, and not so much the little, home builder. Why? Money. Big builders’ one material advantage over the broader market in the past year was capital muscle. If you had lots and a reserve of cash to invest to build on them, you did well. If, as in “normal” housing cycles, you needed to access financing to acquire lots and structure project loans, you didn’t do well.

This year’s Builder 100 and Next 100 builders, roughly the equivalent of American society’s 2 percent, accounted for more than one out of every two new homes sold (53.1 percent) in 2013. The “200” consolidated gains coming out of the downturn into the early stretches of recovery. While the broader new residential construction community accounted for a year-on-year jump of about 13 percent, to a total of 430,000 new-homes sold, our community of home building’s 200 biggest players rocked a 24 percent increase on an absolute jump of 43,968 homes.

For 2013, the minimum barrier to entry into the vaunted top 100 ranking was 406 homes. That’s a 27 percent hurdle to have cleared versus the minimum number of 2012 units, and eight companies made that leap with aplomb: Eastwood Homes, American West Development, AV Homes, TRI Pointe Homes, The New Home Co., The Providence Group of Georgia, Dunhill Homes, and Robson Communities. We salute them and welcome them to the show.

And don’t say there weren’t challenges in 2013. Let’s name a few. How about credit, both for builders and buyers who need financing to go through with their purchase? Arguably, the pendulum of risk-aversion had swung to an unheard of extreme, which made extracting acquisition, development, and construction lending and a 30-year fixed-rate loan for someone with a normal credit rating a have-fun-trying experience. What about labor? What about entitled, approved, and developed lots? What about the Fed taper, introduced with such finesse by former chairman Ben Bernanke mid-year? And how about that little interruption in all government activities that occurred during the first two weeks of October?

That’s not to mention chronic issues like flat-lining household incomes, lumpy geographical recoveries, and a growing mismatch between job openings and individuals with the required skills.

If builders could do what they did despite the challenges, shocks, and impediments of 2013, they’re apt to be able to do themselves one better this year. They’re looking beyond the external forces at their internal mechanics, people, process, and programs. They’re improving as they go, which is what home building’s 2 percent is all about right now.

 

By  with Builder www.builderonline.com on May 9, 2014

Twice as Many Consumers Prefer New Homes to Existing

Larger closets, open floor plans, and roomy kitchen islands seen as big draws of new homes.

 

While twice as many American consumers prefer a newly built home compared to an existing dwelling, many are reluctant to pay extra for new, according to the results of a new survey from Trulia.

Forty-one percent of respondents said they prefer to buy a new home over a previously lived in one, compared to 21 percent who said they would prefer an existing home at the same price. But of those buyers interested in new homes, only 46% were willing to pay the 20% premium that new homes typically require. In fact, only 17% of respondents said they would pay at least 20% more for a new home.

Trulia compared median prices for a new home adjusted for property features and location and found that new homes are typically priced 20% higher than older homes with similar attributes such as square footage and number of bedrooms in the same zip code.

The survey explored consumer preferences for each type of home. The top reasons respondents prefer a new home are for modern features such as bigger closets, a kitchen island, open floor plan, walls pre-wired for flat screen TVs, radiant floor heating, to be able to customize the home before construction is completed, and to spend less on maintenance and repairs.

Fans of existing homes have their reasons, too. The most compelling reason to buy an existing home is to pay less. However, among respondents who strongly prefer an existing home, the top reasons to buy an existing home are for one-of-a-kind finishes such as original wood floors, woodwork, ornate details, or stained/leaded glass windows, and to live in a more established neighborhood.

Interestingly, respondents are much more likely to mention the neighborhood as a reason to prefer an existing home than as a reason to prefer a new home. This suggests that for many Americans, the ideal home might be a new home in an established neighborhood, the survey concludes.

By  – Builder Online – May 5, 2014

Mortgage Relief May Be Easier Than You Realize

Today, I want to have a conversation about mortgages… Specifically, I want to talk about the options that are currently available to homeowners who may find themselves in challenging situations.

As I talk to a number of our current and prospective clients, I continue to see a familiar good news / bad news scenario:

The good news is that the local real estate market is heating up, driving home prices higher and giving homeowners more options with their property. This new surge in demand for residential real estate comes from both organic and institutional buyers.

Organic buyers are essentially individual purchasers who are buying homes for the purpose of occupying the properties. This is the traditional idea of a home buyer. Institutional buyers, on the other hand, are buying properties up for the purpose of either renting or reselling the homes for a profit. In particular, the private equity company Blackstone Group is active in the Atlanta market, plowing hundreds of millions into local home purchases.

The bad news is that many local homeowners are finding themselves in a difficult situation. This can be a result of a change in income since the home purchase, a change in interest rates (as teaser rates expire and payments balloon), or a general change in life as family dynamics evolve.

More and more, we are seeing homeowners in a spot where an adjustment to their mortgage would make a big difference in the financial and life balance picture…

Homeowners Have More Options Than They May Realize

When it comes to challenging mortgage situations, many homeowners have a great deal more flexibility than they have had in the past. This is due both to new government programs, and to an increased willingness to lend on the part of the banks.

A number of government programs have been created to help homeowners who have adjustable-rate mortgages that are in the process of resetting to higher rates. Many mortgage payers don’t even realize that their rates are increasing until they receive a notification of payment change from the mortgage company.

Other programs focus on homeowners who are in a hardship situation. This can result from a change in employment, a medical or disability situation, or other life issues that arise and cause difficulty for homeowners.

Finally, with property prices increasing, the banks are now much more willing to consider a mortgage adjustment because the underlying property now has value and can be sold in the event of a foreclosure. When banks see valuable collateral, they are much more willing to set up an attractive mortgage arrangement.

My point here is that as a homeowner, you are no longer arbitrarily stuck with your current mortgage. There are many ways to work out a new solution, and at Ashford Advisors, we can help find the perfect program to meet your mortgage needs.

Rental Property Owners Now Have Flexibility Too

As a result of the housing boom (and subsequent bust) many individuals have found themselves in the position of owning extra homes that are being rented out. I’ve seen a number of families that moved to larger homes during the housing bubble, and simply kept their old house for the purpose of renting and creating additional income.

Of course there are a number of individual real estate investors who purchased multiple homes with the intent to flip them – only to be stuck underwater when the real estate tide turned.

With the tremendous amount of buying pressure now lifting real estate values in the Atlanta area, investors who have been stuck with properties now have options as well…

The low interest rates and higher collateral prices can now be a help to investors with mortgage needs. Even though investment loans typically carry a higher rate of interest than mortgages for homes that are lived in, there are a number of banks who will now offer competitive rates for investment properties that can be rented.

This type of mortgage arrangement could be helpful if your investment home needs some remodeling or upkeep. And some investors are able to re-negotiate loans, taking out some equity for repairs, and then get the home into great shape for selling and exiting their investment with a profit.

Setting Up Meetings To Discuss Opportunities

Over the next few weeks, I’ll be scheduling appointments with homeowners and residential real estate investors to discuss mortgage options. If you are in the position of needing some help with your mortgage – or you just want to check into where your mortgage stands, when it resets, or what the terms are – I hope you will call me.

Given the resources that we have at Ashford Advisors, and the network of contacts we have developed in the Atlanta real estate market, I’m sure that we can help with your situation. You may be able to free up additional cash, rid yourself of an unwanted investment, or lower your monthly payments.

It would be my pleasure to help you and your family, and I look forward to sitting down with you. Please give my office a call to schedule your appointment today!

Wishing you every success,
Matt

Matthew J. Riedemann
Founder, President, & Managing Director
Ashford Capital Partners, Ashford Advisors

Spring Comes to the Atlanta Real Estate Market

Spring Comes to the Atlanta Real Estate Market

 

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As we approach spring in the Atlanta area, real estate activity is picking up (even if the outside temperature is not).

On the Ashford Capital side of the business – where we own a number of developed parcels of land – we have seen a dramatic increase in traffic. The premier homebuilders in Atlanta know that our company is the go-to asset holder for high-quality neighborhood opportunities.

Demand for new homes is on the rise, and builders are finally in a spot where inventories are relatively low and they need to be putting up new structures to meet demand.  So as we approach the second quarter, Ashford Capital Partners is in an excellent position to negotiate with these builders.

This year we expect to sign contacts to liquidate a number of these properties at attractive prices, netting a gain for our investors who helped us purchase these properties at distressed prices during and after the financial crisis.

 

Ashford Advisors Expanding Services Offered

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On the advisory side of our business – where we help facilitate real estate transactions – we have also seen a significant pickup in activity.

A number of our clients have commercial real estate holdings that are for lease or for sale. We have been able to assist in the process of leasing these properties, helping the client generate a reliable stream of income. In other instances, we have helped facilitate an actual sale of the client’s property, capping off a profitable investment transaction.

On a more personal level, we have been active in helping a number of clients with mortgage issues. Today, there are a number of programs available to homeowners and business owners to help lower both the level of monthly payments as well as the principal value of the overall loan.

Taking advantage of the options available today can allow some owners to remain in homes that they might otherwise not be able to afford. And in other cases, a mortgage adjustment can free up capital to cover other areas of need.

Depending on your situation, Ashford Advisors may be able to help modify your loan, lease your property, or facilitate a sale that frees up needed capital. If you would like to sit down and discuss what options are available to you as a homeowner, I would be happy to set up a meeting and be your advocate – whatever the need.

 

Mortgage Activity Casts an Encouraging Light on Real Estate

 

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There is one other area of interest that I want to bring up…

For the month of January (the latest month data is available), mortgage activity increased 38% over the level from last year. This is important because it shows that economic activity around residential real estate is picking up.

This is particularly encouraging as we head into the spring season which is historically an active time for home purchases. Young families typically pick the spring season to make a move, allowing their children to adjust to a new location at the end of a school year.

So with real estate activity already beginning to increase, this spring is shaping up to be a great period for selling a home or for leasing rental property. If you have been considering a move, or if you have a house, condo, or business that needs to be leased, please give me a call and find out how Ashford Advisors can assist you in achieving your financial goals.

Wishing you every success,

Matt

Matthew J. Riedemann
Founder, President, & Managing Director
Ashford Capital Partners, Ashford Advisors

678-231-4579
[email protected]

Interest Rates, Stimulus Dollars and Real Estate Activity

Last week the Federal Open Market Committee (FOMC) held the most anticipated meeting of the year. Investors and economists had high expectations for Bernanke & Co. to launch a new round of quantitative easing.

Under this type of program, the Fed injects more cash into the economy by purchasing bonds in the open market. This in turn pushes interest rates lower and helps to stimulate economic activity.

Thursday, the Fed announced that they would initiate a new program under which they are committed to buy $40 billion worth of mortgage-backed securities (MBS) each month for the foreseeable future. This is in addition to the current program in which the Fed is buying $40 billion worth of Treasury bonds per month.

The Fed also reaffirmed their commitment to keep interest rates essentially at zero – and they are extending the time period for these rates through mid 2015.

Even though traders and economists had positive expectations heading into the meeting, the magnitude of the additional stimulus caught investors by surprise. Stocks rallied sharply after the announcement – reflecting expectations that the broad economy should respond positively to the additional liquidity and low interest rates.

How Does the Fed’s Plan Affect Real Estate?

There are two key ways that the Fed’s new round of quantitative easing will affect the real estate market.

First, the commitment to keep interest rates at historical lows through 2015 dramatically increases the risk of inflation. We have already seen the US dollar trade lower (leading up to the Fed’s announcement, and falling even more after the news release).

As the value of the US dollar declines, the purchasing power of dollar-denominated savings and investments will drop. Many economists refer to this as a “hidden tax” on savers because a fixed amount of dollars can no longer purchase the same amount of goods & services.

The way to guard against this erosion of value is to invest in non-dollar denominated assets – typically tangible assets such as precious metals or real estate. The great thing about an investment in real estate is that you can actually enjoy your investment while it appreciates in value.

If you would like to know more about opportunities to protect the purchasing power of your savings by investing in real estate, we should definitely have a conversation. There are a number of different options including purchasing vacation property, rental property, or investing in one of Ashford Capital’s residential development projects.

This is a great time to be protecting your hard-earned dollars and I would be happy to help you evaluate which options work best for your particular situation.

The second result of the Fed’s recent decision will be an increase in real estate activity. You see, with the Fed buying mortgage-backed securities, rates will continue to be very low – making it easier for individuals to purchase new or existing homes.

A couple of weeks ago, we talked about “residential mobility,” or the ability for homeowners to now sell their homes in order to upgrade to a new home or pursue new job opportunities.

As real estate transactions continue to increase, that mobility will become even better and there is simply no reason a current homeowner should be stuck in a home that he or she doesn’t want to be in.

Whether your home value is above or below your current mortgage balance, my team can help you explore options for selling or leasing your current residence, and we can also help you locate and purchase a new home that better meets your needs.

Let’s set up a time to get together and discuss how your real estate decisions can position you to take advantage of today’s economic environment. Don’t let inflation or a bearish perception of the housing market hold you back from capitalizing on today’s opportunities!

Wishing you every success,

Matt

Matthew J. Riedemann
Founder, President, & Managing Director
Ashford Capital Partners, Ashford Advisors

678-231-4579
[email protected]