from National Association of Realtors
Owner-occupied refinance options could get a lot more forgiving, if the votes go the right way on the Hill.
In a letter from NAR President Gary Thomas to Senators Mary Landrieu (D-LA) and James Risch (R-ID), NAR support for a key commercial real estate bill is spelled out.
The issue addressed by the bill, S.289 “Commercial Real Estate and Economic Development Act of 2013≤, is the impending maturity of $1.3 trillion in balloon mortgages. Between 2013 and 2016, a wave of maturities is headed to holders of these instruments and market options for refinance being what they are, there’s a real risk of higher loan defaults, delinquencies and business failures.
The bill doesn’t create a new program for such mortgage holders. Instead, it temporarily allows commercial real estate projects to be eligible for the already-existing SBA refinance program called 504/CDC.
Nearly $1.3 trillion of commercial real estate loans with balloon mortgages will mature between 2013 and 2016, with very limited options for small businesses and other commercial property owners to refinance. If not addressed, the swelling wave of maturities could result in higher loan defaults, delinquencies, and business failure – further endangering economic recovery.