Tightened Commercial Lending Guidelines Still Remains, According to Recent Federal Reserve Survey

A good number of banks continue to report “having tightened standards” on commercial real state loans, according to an April, 2010 Federal Reserve Board survey of 53 domestic banks. But the number of U.S. banks reporting stricter lending standards has dropped since the last survey was conducted in January, 2010. The Federal Reserve survey also asked banks if commercial loan extensions were in use. “Sizable fractions of both domestic and foreign respondents reported having increased their use of CRE loan extensions over the previous six months”, according to the Federal Reserve board’s website.As a wave of commercial mortgages become due, many borrowers will not be able to refinance because of tightened underwriting guidelines. Reports also indicate an increase of delinquent commercial mortgage loans. On a good note, the survey said there was an increase in the use of extensions by banks. Banks may approve extending the reset period or maturity date of the loan as part of the commercial loan modification.During the early 2000′s, billions of dollars worth of commercial mortgages were originated with 5, 7 or 10 year reset periods. After the reset period ends, the total loan amount in the form of a balloon payment is due. Lenders added the balloon payment feature to limit their risk exposure. Problem: almost half of all commercial real estate properties are underwater, meaning that the property value is less than the mortgage balance. Along with stricter lending standards, this is the reason why many commercial property owners can’t refinance.As part of the commercial loan workout process, commercial loan modifications can increase, or in some cases eliminate the maturity date. Commercial loan workouts are encouraged by federal regulators to help commercial borrowers avoid foreclosure. This new policy will help banks who were hesitant in the pass to provide commercial loan workouts to proactively offer solutions to distressed commercial property owners. FDIC Chairperson Bair said the Prudent Commercial Real Estate Workouts policy “emphasizes that restructured loans will not be subject to adverse classification by examiners solely because the value of the underlying collateral has fallen. In fact, institutions are encouraged to implement prudent, loan workouts based on an updated picture of the borrower’s financial condition.”These new guidelines are designed to help banks and borrowers alike, due to the present state of the economy. “Solid loan workouts that are based on the documented financial capacity of the borrower and the long-term prospects of the underlying project” Bair said.Key to a successful commercial loan workout is the borrower’s ability to repay the restructured loan or workout plan. If banks can’t document this, then the commercial loan workout is a “no-go”. If a commercial loan workout is denied, other alternatives may exist for borrowers to avoid foreclosure.A “short sale” allows the borrower to sale their commercial property for less than the actual mortgage balance. But a financial hardship must be documented. Another alternative: “Deed in lieu of foreclosure”. A deed in lieu of foreclosure grants the property owner the right to convey their commercial real estate to the bank to avoid foreclosure. But it would be wise to consult with a legal and/or tax advisor before considering these options, due to possible tax consequences.

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6 Reasons to Buy Slipcovers for a Furniture Makeover

Often a furniture’s upholstery wears out before the frame. Or, sometimes interior design fashions change leaving your furniture looking dated. And then there are times when you want to protect your furniture from getting damaged.The fact is there are many reasons to buy furniture slipcovers.6 common reasons people buy slipcovers are as follows:1. Inexpensive way to redecorateIf you redecorate, it’s much less expensive to dress your furniture with slipcovers than re-upholstering or buying new furniture.Slipcovers come in a huge variety of options so you are bound to find the style, design, color, texture, and material that’s perfect for your new interior design.2. Upholstery is wearing out yet furniture frame is perfectly goodIf you bought quality furniture, it can happen that the upholstery wears out before the frame and infrastructure. Rather than giving away, throwing away, or selling for far too cheap, buying slipcovers is an inexpensive option for prolonging the life of your furniture.3. Protect your furnitureIf you’re throwing a big party and need your furniture for the celebration, slipcovers are an inexpensive way to protect your furniture without wrapping them in plastic. In fact, slipcovers look great and won’t be an eye-sore during your celebration.You can also buy protective slipcovers for patio furniture and barbecues.4. Improve shoddy furnitureIf you have a bunch of chairs that you’re going to use for an event, such as a wedding, you can turn ugly steel sterile chairs into attractive, stylish, and elegant chairs with full-length slipcovers.5. Dress up your used furniture purchaseIf you find some quality used furniture, but aren’t keen on the upholstery, slipcovers are a fantastic way to dress up your used furniture purchase so that you have quality furniture in your home that looks great.6. Moving to a new home or moving furniture to another roomThis reason to buy slipcovers is similar to #1 above. If you want to move your furniture to another room, your moved into a new home, or are moving furniture to an office, it’s easy to match your furniture to the new environment with slipcovers.
Covers for furniture are an inexpensive and stylish way to give your furniture a makeover which then gives your room a makeover. There’s a reason slipcovers are extremely popular for DIY home owners.Regardless of your reason to buy slipcovers, the best part is they are an inexpensive solution.

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