I am a loan officer with a hard equity lender in South Florida, and it seems that our guidelines are constantly changing. Our investors are nervous because of today's market. Their concern is, if we take a property back, we have to sell it low enough to compete with everybody else's REO.
I feel like we are in an environment where banks are actually self-destructing by driving property values down (dumping their stock).
They get into a vicious cycle of lowering property values because they are forced to keep lowering REO prices to move them.
I'm curious to know what people in other areas are hearing from their private and hard equity lenders...
- how have their guidelines changed in the past 6 months?
- what types of deals are they willing to do?
Real Estate Investor · Baroda, MI · Member since 2008 · 204 posts · 2 votes
18y
I think the banks are shooting themselves in the foot. This is spring boarding from a bad situation to a national disaster. With gas prices at an all time high, people are being forced to either pay for gas to get to work or pay the mortgage. Those prices are translating across the board into groceries (and have been for quite some time) and other goods and services. Has inflation ever hit this economy so hard? I don't know.
My commercial lender will now not touch a deal without 20% down and there has to be a very HIGH ARV. I think it will be impossible to even get a next deal without cash. My lender has stated that he foresee a mass exodus out of the MCmansions and back into smaller, more affordable homes and I agree with that.