Mortgage-backed securities aid refinancing.Although banks are effectively out of the real estate market for the time being, financing is available -- and at rates lower than banks charge. Mortgage-backed securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. is a concept that entails issuing a bond that's backed by a mortgage on a building or a portfolio of buildings. The concept is not a new one; it's been employed for many years in transactions involving single-family housing, but only recently has it spread to multi-family developments, along with commercial projects. The concept has proven a winner for the Federal government's Resolution Trust Corporation, which has used it extensively. In addition, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. some experts, mortgage-backed securitization will continue to spread as the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. undertakes the process, and as banks and insurance companies continue to restructure their portfolios. We at Nelson Equities are well acquainted with this approach. We employed it in the past year to re-finance -- at 7 percent - four residential rental properties we've owned for many years in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Accordingly, we have an appetite for additional acquisitions that use this method of financing. If you're looking to sell or buy, mortgage-backed securitization may be the way to go. Of course, not every property is appropriate for this approach. There are at least three requirements: 1) The ability to place a mortgage or mortgages-on the properties 2) The ability to pay back the debt 3) The ability to get an adequate rating The last may be the most tortuous tor·tu·ous adj. Having many turns; winding or twisting. tortuous adjective Referring to complexly twisted thing. Cf Tortious. requirement of the three. After all, underwriters are particular about what kind of property for which they're willing to arrange securitization. They prefer residential, industrial and shopping center shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into properties, while - understandably, in today's market - office buildings and hotels are not on their list. And while all this may take time (our securitization took about six months), it can be done. It's been an especially appealing approach for our company. We have 35 years' experience in developing more than $1 billion of residential and commercial properties. We own and manage more than 2,000 residential units in New York City, and four parcels of land in Putnam and Dutchess Counties, which we plan to develop into residential communities totaling more than 1,000 acres. We're also developing Water's Edge on Saratoga Lake, a 349-unit, 125-acre luxury-housing development. In addition, we're planning to develop two apartment buildings in mid-Manhattan. And we're eager to buy residential properties with good net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the Northeast. If you're looking to sell (or buy), then - like us-you should think seriously about mortgage-backed securitization. At a time when frustration is the hallmark hallmark, mark impressed on silverwork or goldwork to signify official approval of the standard of purity of the metal, also called plate mark. The hallmark was introduced by statute in England in 1300 and enforced by the Goldsmiths' Hall, London. of many in the real estate industry, mortgage-backed securitization offers a rare opportunity for optimism. |
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