LOS ANGELES—While many people are speculating that the Trump administration will mean fewer banking regulations next year and beyond, for now, all of the Dodd Frank regulations are still in effect—and borrowers should be planning for them. Mike Yim, managing director at Quantum Capital and a capital markets expert, recommends that all borrowers seek guidance to navigate these regulations.
“What may steer borrowers away from traditional lending sources will be the new HVCRE and Risk Retention regulations,” Yim tells GlobeSt.com. “Over the last few months, we at Quantum have spent a lot of time educating our clients on these new regulations. We recommend anyone considering a construction loan or CMBS loan speak to a mortgage professional.”
The capital markets are expected to tighten as a result of rising interest rates, which have already started to climb with the Fed's recent hike in December. Higher rates will reduce borrowing capacity, but Yim says, “The rising rates will affect all capital sources so sources of capital will remain unchanged.” Despite tightening markets due to higher interest rates, however, Yim says that there are still plenty of opportunities for competitive financing. The firm has seen tremendous activity in the past 90 days, securing approximately $350 million in both short- and long-term real estate debt.
Overall, Yim doesn't expect rising rates to have a huge impact on the market. “Since the elections, Treasuries have found a new level with the 10-year yield in the 2.50% range, says Yim. “However, even with the recent increase, most sophisticated borrowers understand rates are still historically low and still very attractive.” And, he expects activity to remain strong through 2017, saying, “There may be a slight drop in demand for refinances for the purposes of lowering rates, but refinance activity for maturing debt or purchase debt will be remain the same.”
LOS ANGELES—While many people are speculating that the Trump administration will mean fewer banking regulations next year and beyond, for now, all of the Dodd Frank regulations are still in effect—and borrowers should be planning for them. Mike Yim, managing director at Quantum Capital and a capital markets expert, recommends that all borrowers seek guidance to navigate these regulations.
“What may steer borrowers away from traditional lending sources will be the new HVCRE and Risk Retention regulations,” Yim tells GlobeSt.com. “Over the last few months, we at Quantum have spent a lot of time educating our clients on these new regulations. We recommend anyone considering a construction loan or CMBS loan speak to a mortgage professional.”
The capital markets are expected to tighten as a result of rising interest rates, which have already started to climb with the Fed's recent hike in December. Higher rates will reduce borrowing capacity, but Yim says, “The rising rates will affect all capital sources so sources of capital will remain unchanged.” Despite tightening markets due to higher interest rates, however, Yim says that there are still plenty of opportunities for competitive financing. The firm has seen tremendous activity in the past 90 days, securing approximately $350 million in both short- and long-term real estate debt.
Overall, Yim doesn't expect rising rates to have a huge impact on the market. “Since the elections, Treasuries have found a new level with the 10-year yield in the 2.50% range, says Yim. “However, even with the recent increase, most sophisticated borrowers understand rates are still historically low and still very attractive.” And, he expects activity to remain strong through 2017, saying, “There may be a slight drop in demand for refinances for the purposes of lowering rates, but refinance activity for maturing debt or purchase debt will be remain the same.”
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