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Unformatted text preview: nal loans have traditionally been the lowest among the institutional, though in recent times they have been steadily climbing. 3-8 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 3: INSTITUTIONAL LENDERS
Insurance companies prefer to grant large real estate loans (in the millions) as opposed to smaller residential home loans. Many major commercial and industrial developments have insurance company take– out loans. Construction loans generally are not desired. Instead, life insurance companies will make the take–out, or permanent, loan after the structure has been completed according to plans and specifications. Loan correspondents, such as mortgage companies, are widely used as agents of insurance companies. Many life insurance companies will contract for such representation whenever they deem it profitable. In this way the insurance company is relieved of the burden of originating and processing loans, as well as some administrative and service functions. Correspondents are especially used in California, where there is a high demand for loans, but where few insurance companies are actually headquartered. Detailed information concerning lending authority for insurance companies is found in the California Insurance Code. PENSION AND RETIREMENT FUNDS
Like life insurance companies, pension and retirement funds use mortgages and mortgage–backed securities as a vehicle for investing their reserves. Pension and retirement funds has become potentially the largest sources of real estate financing. There are hundreds of thousands of private pension funds and state, local, and federal pension funds nationwide, representing over $1 trillion in assets. The Mortgage Bankers Association of America projects the growth of these funds will create an enormous amount of potential mortgage funds that could become available to prop up housing and other real estate markets. CHARACTERISTICS OF PENSION FUNDS
Organization – Pension funds are classified as either private or public, according to the nature of the contributing employer. Private funds are regulated by the Employee Retirement Income Security Act of 1974 (ERISA), and p...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10