Bedford Property Investors, Inc. Announces Mortgage Financing
LAFAYETTE, Calif.–(BUSINESS WIRE)–Jan. 3, 1997–Bedford Property Investors, Inc. (NYSE:BED) today announced that it has obtained $25 million of mortgage financing from Union Bank of California. The mortgage financing is secured by an office building in Bellevue, Wash., and seven industrial properties in California. The mortgage loans bear interest at 7.5% per annum and have a five year term.
“With the closing of this $25 million transaction, the Company completed $50 million of long-term financing in 1996,” stated Peter B. Bedford, Chairman of the Board of Bedford Property Investors. “The interest rates continue to be favorable and our 1996 mortgage financings enabled us to take advantage of some excellent acquisition opportunities.”
Bedford Property Investors is a self-administered equity real estate investment trust (REIT) with investments in suburban office buildings and industrial properties concentrated in the western United States. It is traded on the New York and Pacific Stock Exchanges under the symbol “BED.”
CONTACT: Bedford Property Investors, Inc.
Peter B. Bedford or Donald A. Lorenz, 510/283-8910
Deutsche Bank to Acquire Berkshire Mortgage Finance’s Mortgage Origination and Servicing Assets
NEW YORK & BOSTON — Deutsche Bank and Berkshire Mortgage Finance Limited Partnership (”Berkshire Mortgage”), a subsidiary of the Boston-based Berkshire Group (”Berkshire”) today announced they have signed a definitive agreement whereby Deutsche Bank will acquire substantially all of Berkshire Mortgage’s origination and servicing assets. The transaction is expected to close in the fourth quarter of 2004. Financial terms were not disclosed.
Berkshire Mortgage is one of the largest privately held commercial mortgage lenders in the U.S., specializing in financing for multifamily real estate. The firm is a leading originator of government-sponsored enterprise (GSE) and government-insured multifamily loans with $3.5 billion of origination volume in 2003. With a mortgage servicing portfolio in excess of $18 billion, Berkshire Mortgage has significant scale and is a top-tier servicer of multifamily mortgages in the U.S.
Upon closing, Berkshire Mortgage will become a part of Deutsche Bank’s global Real Estate Debt Markets group within the Bank’s Global Corporate Finance business. Deutsche Bank is a market leader in the commercial real estate debt market, with expertise in originating, financing, structuring, securitizing and trading commercial real estate debt. Berkshire Mortgage will advance Deutsche Bank’s existing capital market presence in all of these areas.
Berkshire is a diversified real estate and financial services firm founded in 1969 by brothers Douglas and George Krupp. Berkshire Mortgage was founded in 1987 and has headquarters in Boston, MA, and platform offices in Bethesda, MD, and Irvine, CA. The business will maintain its operational headquarters in Boston, as well as its regional facilities.
“Berkshire Mortgage Finance is a premier name in the multifamily housing sector, and this acquisition will give Deutsche Bank a leading position in an important and very attractive market,” said Jon Vaccaro, Global Head of Deutsche Bank’s Real Estate Debt Markets business. “Uniting these complementary businesses will further solidify Deutsche Bank’s position as a dominant player in the commercial mortgage markets.”
“Berkshire Mortgage has built an outstanding business, and we are very pleased to have them join our team,” said Tom Gahan, head of investment banking for Deutsche Bank in the Americas. “We are excited at this opportunity to further expand our successful Real Estate Debt Markets franchise, in line with our commitment to invest in high growth areas that are accretive to our earnings.”
Douglas Krupp, Chairman of The Berkshire Group said: “Our divesture of Berkshire Mortgage is consistent with our long-term strategy of creating new businesses, growing those business to be market leaders, and creating significant value for our equity holders. Our successful implementation of this strategy includes our formation, growth and sale of Harborside Healthcare, a leading provider of long-term care, and Berkshire Realty Company, Inc, a leading operator of multifamily properties. We expect to continue this strategy going forward within our core competencies. We are most pleased that this sale not only fulfills our economic goals, but provides Berkshire Mortgage and its employees with exciting opportunities to grow the business as part of Deutsche Bank.”
“We are proud to become part of the Deutsche Bank real estate team and excited by the prospect for accelerated growth as part of the Bank’s platform,” said Peter Donovan, CEO of Berkshire Mortgage Finance. “By combining Berkshire’s national origination and underwriting capabilities with Deutsche Bank’s global capital markets expertise, we are well-positioned to be the preferred source of efficient and creative financing solutions to the multifamily real estate market.”
About Deutsche Bank
With roughly Euro 849 billion in assets and approximately 65,700 employees, Deutsche Bank (NYSE:DB) offers unparalleled financial services in 74 countries throughout the world. Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.
Deutsche Bank ranks among the global leaders in corporate banking and securities, transaction banking, asset management, and private wealth management, and has a significant private & business banking franchise in Germany and other selected countries in Continental Europe.
Deutsche Bank Securities Inc. is the investment banking and securities arm of Deutsche Bank AG in the United States. http://www.db.com
About The Berkshire Group
The Berkshire Group was founded in 1969 by brothers Douglas and George Krupp. Their portfolio of companies have included Berkshire Realty Company, Inc. (New York Stock Exchange listed 1991-1999), Harborside Healthcare Corporation (formed 1987, New York Stock Exchange listed 1996-1998), and Berkshire Mortgage Finance (formed in 1987).
Globalization of mortgage and finance industries predicted
Major realignments and refocusing are leading to a new globalization of the mortgage and finance industries, according to Michael Landau, president and CEO of Hampstead Financial Corp.
Addressing a seminar on “Loan Production and Strategic Alliances” at the 84th Annual Convention of the Mortgage Bankers Association of America in Manhattan, Landau predicted that the mortgage market is entering a new era in which mortgage professionals will provide a more complete array of financial products.
“Instead of ‘vanilla mortgages,’ mortgage professionals will accommodate borrowers seeking convenient, ‘one-stop shopping’ by offering much more efficiency and choice,” he said. “Instead of today’s traditional lenders, we will see newer, agile and more responsive mortgage companies taking their place.”
Emerging Mortgage Finance in Armenia
The broad availability of mortgage finance accelerates the pace at which households improve their housing conditions by permitting them to leverage their current income and savings. While there were a few long-term housing loans in the former Soviet Union, such loans were really little more than an element of centrally allocated credit.2 So, Armenia, like the other former Soviet republics, entered the transition period with no tradition of mortgage lending. The development of such lending has been hampered by the immaturity of the banking sector and macroeconomic setbacks.
Stability and impressive growth rates have been the key Armenian economic characteristics of recent years (see Table 1). Under these conditions the demand for housing has expanded and can be expected to continue to grow. The Central Bank of Armenia (CBA), the Ministry of Finance and Economy (MoFE), and the private banking sector all recognize the need for improved mortgage finance services to augment this demand. They see the commercial and development opportunities that development of mortgage lending entails. In recent months there has been an impressive degree of discussion and planning about how to undertake this improvement, as evidenced by the frequent articles in the news media on trends and development and the preparation of concept papers by the CBA and MoFE.
This is the appropriate time, therefore, for a systematic analysis of how private mortgage lending can develop in Armenia. This article summarizes the results of such an analysis. The analysis was prepared as the response of KfW (Kreditanstalt fuer Wiederaufbau) to a request from the Government of Armenia to develop the concept for mortgage market development, building on the work already done by Armenian experts.
To set the stage for the discussion of the development of mortgage market, the balance of this introduction outlines the general economic and housing situation in Armenia in which mortgage market development will occur.
Macro-economic Environment
Armenia’s early transition was exceptionally difficult. Its economy was battered by three separate factors. First, the country was still trying to recover from its severe 1988 earthquake. When the Soviet Union dissolved in 1991, assistance from the USSR came to an abrupt halt and resources that could be spared had to be allocated to this disaster zone. Second, the NagornoKarabak conflict drained resources from the private economy to the battlefield and severely isolated Armenia economically. Third, Armenia like other former Soviet republics began the “shock therapy” transition to the market economy. The impact of this combination was devastating, as shown in Table 1.
From the year 2000, the economy has steadily improved and has grown at very respectable rates for the past three years. Reflecting the huge underutilized capacity in the country, inflation has remained lowto-moderate despite the strong economic growth. (The spike in 2003 is attributed to a supply-induced increase in the price of bread.) There is a general sense that growth has been concentrated in Yerevan. Some observers think that increased levels of international aid will result in realized growth in the next years over the levels projected in the table.
Still, household incomes remain at low levels. In 2002, per capita Gross National Income (GNI) was $790 according to the World Bank.3 On the other hand, poverty rates were very high: 49 percent of households lived in poverty and 17 percent in extreme poverty.4
With respect to the financial system, a low degree of monetary depth and intermediation activity are common among the so-called CIS-7 countries, the poorest of the successor states to the Soviet Union that include Armenia (Table 2). The CIS-7, as a group, compares poorly even with the countries of Southeastern Europe, not to mention Central and Eastern Europe. Low intermediation is associated with higher interest rates and bank spreads.5
Further data, specifically for Armenia and selected Eastern European transition economies, Russia, and two western European countries, are presented in Table 3 for 2002. These figures illustrate the challenges remaining for Armenia’s financial markets to become deeper and more efficient. The magnitude of Armenia’s interest rate spread and risk premium on lending figures are particularly noteworthy. At the end of 2003, the CBA reported spreads on AMD and dollar deposits and loans of 17.8 and 14.9 percentage points, respectively.10
Improving financial depth is important beyond the housing sector because of its clear relationship with sustained economic development. At the same time it is important to note the positive role that development of mortgage lending can play in increasing financial debt.
After a period of instability beginning with the transition, the commercial banking sector has gained its footing. Some further consolidation among the 20 existing banks is anticipated as banks must meet higher capital requirements in July 2005.
Berkshire Mortgage Finance
Freddie Mac announced that its Negotiated Transactions unit has closed a $62.8 million multifamily Gold PC Swap with Berkshire Mortgage Finance. The transaction involved the exchange of four fixed-rate mortgages originated by Berkshire for Equity Residential Properties Trust (EQR), a Chicago-based publicly traded real estate investment trust. The mortgages finance four properties, providing nearly 2,000 housing units in the state of Maryland.
“This transaction exemplifies the breadth of our securitization business,” said H.L. Van Varick, vice president of Negotiated Transactions in Freddie Mac’s Multifamily Division. “In a competitive market, our attention to service and creative structuring are what set us apart.”
“This was a fairly complex refinancing because these properties had been part of a large acquisition, invoking a considerable amount of operating partnership units. As a result, EQR had some very specific structuring needs that Van Varick and his team at Freddie Mac were able to address with a great deal of creativity and flexibility,” said David Neithercut, EQR’s executive vice president and CFO.
“We were very pleased with Freddie Mac’s response time and their ability to find a way to make this complicated deal work for everyone,” said Kyle Draeger, assistant vice president at Berkshire.
Since the introduction of the Freddie Mac Program Plus network of multifamily loan originators and servicers in 1993, Freddie Mac has provided financing for nearly 5,000 multi-family properties totaling more than $17 billion.
Mortgage Refinancing: Saying No to Prepayment Penalties
If you are refinancing your mortgage there are a number of fees and penalties you want to avoid paying. Many homeowners focus only on finding the best interest rate when refinancing their mortgage loans. These homeowners often overpay for everything else on their loans and take out mortgages with prepayment penalties. Here are several tips to help you avoid overpaying for your new mortgage with a prepayment penalty.
Mortgage lenders include prepayment penalties in their loan contracts to discourage borrowers from refinancing the loan. If you sell your home or refinance before the penalty expires you will be required to pay a fee. Prepayment penalties can be quite expensive; it is common for lenders to charge up to six months worth of interest on 85% of the original loan balance. If you finance your mortgage with a bad credit you can expect more stringent prepayment penalties included with your loan.
There are ways to avoid prepayment penalties, even if you have poor credit. The first thing you should check before mortgage refinancing is if your existing mortgage includes this prepayment penalty. If your current mortgage does not have a penalty or the penalty has already expired you are clear to begin mortgage refinancing. If your prepayment penalty has not expired, you can try negotiating with your current lender to see if they will discount or waive the penalty for you. If the existing mortgage lender will not negotiate you will be required to pay the penalty to refinance your loan.
When mortgage refinancing, most items on the loan contract are subject to negotiation. If you haven’t signed the contract and you find it contains a prepayment penalty, you should negotiate with the lender to have that penalty removed. If you have excellent credit your credit rating is a bargaining chip; threatening to find another mortgage lender will usually do trick. Another thing you could try is offer to pay an additional point in exchange for having the penalty removed. Points are a fee you pay in exchange for something from the lender. You can negotiate to pay points in exchange for a lower interest rate or more favorable terms, in this case to remove the prepayment penalty.
To learn more about mortgage refinancing while avoiding costly homeowner mistakes, register for a free mortgage guidebook.
Getting 100% Mortgage Financing With a Bad Credit Score
100% financing of a mortgage with bad credit can be almost as easy to get as if you have good credit. Subprime lenders are usually willing to offer full financing. In some cases, they will also wrap in the closing costs as part of the loan. You have a couple of loan options for financing your home purchase.
The Cost And Savings Of 100% Financing
100% financing can get you in a home with little to no closing costs. So instead of paying rent, you can be building up your home’s equity. With no down payment, you can also spend your cash on moving expenses.
The drawbacks to full financing are higher interest rates and fees for this type of loan. Shopping around for financing packages can protect you from some of these loan costs.
With a subprime loan, you don’t have to pay private mortgage insurance (PMI) that conventional loans require you to pay.
Financing Options – 1 Or 2 Loans
You have two options for no down payment loans. The first is to work with a lender for one loan that covers the entire cost of the home. You can also find loans that include the closing costs, usually called 102% loans. With one loan, you will find higher rates and fees. However, you just have one company to deal with.
Another option is to finance your mortgage through two different companies. This spreads the risk around, so you qualify for lower rates. You can also close your first mortgage with a down payment, and then take out a home equity loan or line of credit to use the cash.
Planning For The Future
Financing your mortgage has to be based on your future home plans. With 100% financing, you need to plan on living there long enough to build up some equity to cover the initial loan costs. Otherwise, you could end up owing on a loan if the home’s price depreciates or you took out loan of 102%. Fortunately, in most housing markets, you can reach this point in a year or less.
You can also plan on refinancing your mortgage when your credit improves. However, if you transition to a conventional loan, be prepared to pay for PMI if you don’t have at least 20% equity built up.
Options to Finance Your New Home
Are you feeling overwhelmed with the sheer number of different types of mortgage loans? Not sure which one will work best for your situation and needs? Read on for tips to help you compare the advantages and disadvantages to the most common types of mortgage loans.
First, it is important to understand the difference between a variable or adjustable interest rate mortgage and a fixed rate mortgage. With a fixed rate mortgage you gain the advantage of monthly mortgage payments that do not change; however, your interest rate may be slightly higher than what is offered with an ARM. With an adjustable rate mortgage while you will typically have a lower introductory interest rate, that rate may fluctuate over the duration of your loan. This can mean your monthly mortgage payments may become higher or lower, depending on whether interest rates are raised or lowered.
Beyond adjustable rate mortgages and fixed rate mortgages you also have other options in terms of how long you finance your home. The most common terms are 15, 25, 30, 40 and now even 50 year mortgages in some areas. Keep in mind the longer you finance your mortgage the less your payments will be per month but the more you will pay in interest over the duration of the loan.
There are also special types of loans offered which may offer certain advantages. These types of mortgages include FHA and VA home loans. A FHA home loan is often attractive to first time home buyers because it allows the purchase of a home with a lower down payment, in some cases as low as 3%. There are certain qualification regulations in order to be approved for a FHA home loan; however. You must have good credit history and enough income to cover the loan and your other financial obligations. Typically, all of your housing costs each month, including house note, property taxes and insurance cannot exceed 29% of your gross monthly income. In addition, your housing costs plus your other monthly long-term debt should not exceed 41% of your gross monthly income.
VA loans are made available to veterans of the U.S. armed services for the purchase of homes. With this type of loan you can purchase a single family home, condo, new construction or even a manufactured home. You should be aware that you’ll usually need to pay a 2% fee when the loan is closed. One of the best advantages to this type of loan is that 100% financing is available. In addition, you don’t have to worry about private mortgage insurance, which is required in certain cases when you are financing more than 80% of the home’s value. You may also be able to take advantage of a competitive interest rate.
Other options include balloon mortgages and hybrid mortgages. With a balloon mortgage you may be able to lower your monthly payments by agreeing to pay a portion of the mortgage in a lump sum at the end of the mortgage. The disadvantage to this is that you will have to come up with the money or try to extend the loan; which may or may not be available.
With a hybrid loan you can sometimes take advantage of a lower interest rate in the beginning of your mortgage, perhaps for three to five years, when you may be struggling more to make the payments. After this time period has passed, the interest rate will rise and you will be responsible for a higher monthly mortgage.
Home Mortgage Lenders - How to Find A Good Mortgage Broker Online
Mortgage lenders have set up shop online, but they aren’t all reputable mortgage brokers. To find a good mortgage lender you need to compare rates and research to find reputable companies.
Mortgage Broker Services
A mortgage broker works with several lenders to find the best financing for the purchase of a home. No matter if you have perfect credit or bad credit, typically a mortgage broker can find you a lower mortgage rate than if you went with your neighborhood bank.
It is important to remember that brokers are paid by adding on a fee or point to the loan, so you should do comparison shopping even with a mortgage broker.
One Stop Shopping
Online mortgage brokers have reduced time spent comparing mortgage lenders by consolidating information about several lenders into one site. Through such mortgage sites, you only enter your information once to receive interest rates from several different mortgage lenders.
Compare Rates And Fees
While online mortgage brokers make getting quotes easy, it is important to still take the time to compare rates. Your mortgage rate will be based on current interest rates, the property’s location, your credit score, and employment history. If you receive a rate quote without providing this detailed information, then you are just getting a general estimate.
General estimates for mortgage rates are still a useful tool to narrow your choices to at least three lenders. You can then apply for a true mortgage estimate with the most promising companies. With these true mortgage quotes, look at both the rates and fees to determine the actual cost of the loan.
Research Reputable Companies
Interest rates aren’t the only factor to consider when comparing mortgage lenders. You should also be comfortable with the lender’s reputation. Unfortunately, there is not a list of reputable mortgage lenders, but common sense can protect you from a bad mortgage lender.
First, do research on your top choices for mortgage lenders. Check out the lender’s website to find their physical location, list of terms, and available customer support. Secondly, beware of too good to be true claims, such as statements that this is the only company that will finance your mortgage loan. And finally, do not sign any blank forms from a lender. You don’t know what they add later.
Home Loan Finance And Mortgage Refinance Options
After buying your home it is now time to find the perfect mortgage financing. Make sure you consult an expert Mortgage Consultant in terms of financing that fits your needs. There are many choices available to you for home loan finance and mortgage refinance. But it is critical that you take your time to understand the various choices before making a final decision. Here are some home financing options:
· Fixed-Rate Mortgages
· Adjustable Rate Mortgage(ARM)
· Interest-Only Mortgage Loans
· Conforming Loans
· Jumbo Loans
· Subprime Mortgages
· Hybrid Mortgage Loans
· 100% Financing
· Conventional Loans
· Government Loans
Refinance for My Current Home
If you presently own your home, refinancing to a lower rate can save you dollars. Help increase your cash flow. Here are some reasons to refinance;
· Consolidate and pay off your debt
· Pay for your home improvements
· Start your business
· Pay your major medical bills
· Buy your car
Leverage the Equity in My Home
A home equity line of credit (HELOC) is an alternative to finance major items. The mechanics of a HELOC is analogous to the way a credit card work. The equity in your home is used as collateral for a loan which is a revolving line of credit from which you can draw money. You receive a set checkbooks or a type of credit card you can use to pay for items during times of purchase. HELOCS can be used for:
· Your home improvements
· Consolidating and paying off your debt
· Taking your dream vacation
· Buying your second property
· Paying for your major purchases
· Pay for college tuition