Commercial Loans Are the New Subprime Mortgages
The New York Observer reports: Recently, the Federal Reserve surveyed senior loan officers from 60
large domestic banking institutions and the U.S. agencies of 24 foreign
banks. The results: In the fourth quarter of 2008, 87 percent of loan
officers said they have tightened their lending standards for
commercial real estate loans, a marked increase from the fourth quarter
of 2007, when only 50 percent reported tightening standards.
In the fourth quarter of 2008, 100 percent of loan officers
reported tightening standards for subprime loans, in contrast to 55.5
percent at the same time the year before.
Dan Fasulo, managing director of Real Capital Analytics, said the data underscored a “disturbing” trend.
“Good, healthy owners can’t get loans right now,”
Mr. Fasulo said. “And that’s really spooked the industry into action.
We have our representatives down in Washington right now. There’s just
too much debt that needs to be refinanced within the next year. What
everyone’s worried about is the fact that it doesn’t look like the debt
markets have the capacity to handle the demand coming down the
pipeline. It’s scary.”
View the full article on The New York Observer: Commercial Loans Are the New Subprime Mortgages
Posted by: Matthew Stone