End of Chapter 20 Questions and Answers

End of Chapter 20 Questions and Answers - End of Chapter 20...

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End of Chapter 20 Questions and Answers 1. How is the commercial mortgage underwriting process different from the residential mortgage underwriting process? Answer: There is much more emphasis on the property and income generation of the property versus emphasis on the borrower in residential lending. In non-recourse loans the borrower is not considered in detail but the property is carefully reviewed. In commercial lending the LTV tends to run lower, generally no more than 75%. Commercial loans are not pre-payable except with significant penalties. 2. Who are the primary lenders of commercial mortgage money? Use updated sources of data from the Federal Reserve Bulletin or other resources to estimate the market share of commercial banks, life insurance companies, pension funds, savings institutions, REITs, and mortgage backed securities. Answer as of 2002: Commercial Banks 51% Savings Institutions 6% Life Insurance Companies 14% Foreign Investors 1% Mortgage Pools and Conduits - CMBS 18% Pension Funds <1% Individuals, and others. 5% REITs 4% 3. A property has an stable net operating income of $1,500,000 per year. With a loan to
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This note was uploaded on 02/07/2012 for the course FIN 4380 taught by Professor Staff during the Spring '08 term at Texas State.

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End of Chapter 20 Questions and Answers - End of Chapter 20...

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