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Small Balance Commercial Mortgage Lenders have Positive Outlook for 2015

Commercial Mortgage
Posted on 
January 20, 2015

After 2014’s strong performance, commercial and multifamily property lenders are expecting to see an increase in 2015, according to National Mortgage Professional. Reporting on a new Mortgage Bankers Association survey of top lenders, NMP states that lending and borrowing appetites remain strong. Each firm surveyed expected originations to increase in 2015, with 68 percent anticipating an increase of five percent or more.

“Commercial mortgage lenders anticipate another competitive year in 2015,” said Jamie Woodwell, MBA’s vice president for Commercial Real Estate Research. “Lenders’ appetites for loans remain very strong, and with the 10-year loans made during 2005, 2006 and 2007 maturing, lenders also anticipate growing demand from borrowers.”

The commercial mortgage market is expected to grow at a strong pace in 2015, with 68 percent of MBA survey respondents anticipating originations to increase to five percent or more. According to the survey, about three-quarters expect their own originations to increase by five percent or more.

Loans in every major investor group are expected to increase this year, and loan risk is also expected to grow this year, with 38 percent of respondents expecting loans to be “somewhat high risk.” Most respondents described loans made last year as “medium” risk, according to the survey.

With expected increases in lending and borrowing for 2015, now is a great time for brokers to expand into the small-balance commercial mortgage industry. Whether you handle mainly residential mortgages or larger-balance commercial loans, getting involved in the small-balance business is a great decision. Brokers offering small-balance products will have the opportunity to work with an under-served market and earn additional income.

For more information on small-balance commercial mortgages, call APEX at 800-262-2739.


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