real estate finance - full book (500 pgs)

Trends in the savings bank industry increased

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Unformatted text preview: loons) in as few as three to five years, or for rollovers thereafter at the prevailing market rate. These have monthly payments amortized for 30 years, but the unpaid balance is due in three, five, or seven years. Dynasty School (www.dynastySchool.com) 3-5 REAL ESTATE FINANCE Interest rates in the past were highest among the Institutional real estate lenders. This was due to the large demand for loans and to the higher risks associated with higher loan–to–value ratios. (High loan–to–value means that the amount of the loan is high in relation to the appraised value or sales price of the property.) Currently, rates charged by commercial banks and savings banks are basically the same. Their basic real estate lending is on single–family, owner–occupied dwellings, but in a favorable market thrifts wilt also finance mobile home loans, non–owner–occupied dwellings, apartments, and commercial and industrial properties. Combination loans are often available. Such loans combine construction (short–term financing) and take–out loans (long–term or permanent financing) into one loan. Savings banks are permitted to make collateral loans secured by the borrower's savings accounts, savings certificates, bonds, existing secured notes, and certain other forms of readily liquid assets. Savings and loan institutions get most of their funds for real estate loans from individuals saving. TRENDS IN THE SAVINGS BANK INDUSTRY Increased competition from commercial banks and mortgage companies, combined with imbalances between money–scarce and money surplus areas that create demands for multiregional lending programs, have contributed to the loss of stature of savings banks (thrifts) as the principal source of home loans. MUTUAL SAVINGS BANKS Mutual savings banks have been in existence since the early 1800s for the primary purpose of promoting individual thrift. They fall between commercial banks and savings and loan associations in their investment policies. They have greater asset flexibility than the S&amp...
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