Thursday, June 19, 2008

Recourse Loans "Returning"?


This article in the journal yesterday claims that "after a decade of easy lending, the dreaded personal guarantee is making a comeback in the real-estate industry". Are recourse loans truly "returning"? I would argue that they never left; non recourse loans were not the norm even"during the recent sales frenzy for commercial properties". True, CMBS loans are non recourse, but these loans represented about 35% of the debt market, and majority of the CMBS loans are long-term mortgages for stabilized properties. On the other hand, construction loans and other short term loans that stay on banks' balance sheet are typically partial recourse or 100% recourse. Yes, non recourse construction and term loans have been available in recent years, but most of these loans were made to highly reputable developers for projects located in strong markets like NYC, DC.

3 comments:

Sis Rubz on June 19, 2008 11:11 PM said...

thanks for the informations.yes, i agree with your post on loans.

cheap loans on July 09, 2008 2:39 AM said...

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Stuart Pike on September 04, 2008 12:04 AM said...

Nice article. Thank you for sharing....

 

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