Automating financial guidelines are one of the major causes for the current crisis. Tightening the guidelines will not help the system but will be a counterproductive step. Instead, lenders should spend the appropriate time to better analyze property values and borrowers' means and capital needs.
Woodland Hills, CA (PRWEB) September 20, 2008
Real estate investing becomes a more and more complicated task these days. In addition to falling housing prices and a looming recession, financial institutions continue implementing new regulations further limiting the capacity to borrow funds. For many, requirements for full documentation and higher credit scores have made real estate financing virtually impossible.
Recently bailed out by the US Government, Freddie Mac has significantly tightened lending criteria as the institution takes a risk adverse approach in these tumultuous times. Since August 1, 2008 the company implemented significant new restrictions including:
- Borrowers applying for second mortgages may not own more than four financed 1-to-4 unit properties (including the subject property).
- When applying to finance an investment property, a borrower may not own more than four financed 1-to-4 unit properties that are financed (including the subject property).
- A borrower applying for a cash-out refinance mortgage must own the property for at least six months prior to the Note Date of the refinance mortgage.
These regulations have effectively dried up the already stunted pool of capital available for investors, some of them facing insolvency. As a response to the shortage in accessible funds, Peak Capital Group has launched new funding programs to fill the void created by Freddie Mac's recent guidelines. Performing its role as a leading commercial and residential real estate lender, Peak Capital Group has announced two new financing procedures, effective September 20th:
- "Multi Property Financing" - A borrower applying for a second mortgage or investment financing, may hold an unlimited number of properties. In addition, a borrower has the option to use flexible cross-collateralization leveraging on owned investment properties.
- "Maximize leverage of your equity" - Cash-out refinancing will be asset-based only, regardless of the time the borrower has owned the property.
Peak Capital Group's new financing plans are a daring move. Going up against current market trends, Managing Partner, Gil Priel remains confident: "The real estate market is in desperate need of liquidity and investors must be provided the opportunity to leverage their capital and knowledge." Priel also adamantly rejects the idea of across the board financing restrictions, "Automating financial guidelines are one of the major causes for the current crisis. Tightening the guidelines will not help the system but will be a counterproductive step. Instead, lenders should spend the appropriate time to better analyze property values and borrowers' means and capital needs."
"By partnering with a private investment firm with over $12 billion in capital, we are well positioned to capitalize on this growing market and partner with developers, owners, and investors, needing financing throughout the United States," says Priel.
Peak Capital Group (http://peakcapgroup.com) is a real estate investment fund joint-venture. The company is committed to providing fast and reliable financing solutions to commercial, residential, and specialty borrowers. Peak Capital Group finances new construction, hotels, office, retail, strip mall, single-family residential, apartment, multi family, condo and conversion, and land development throughout the United States. Peak Capital Group also purchases a wide variety of non-performing first and second priority mortgages secured by single family residential and/or commercial properties.