Lender Interest Rate Discussion

Top executives from prominent lenders weighed in on many capital market hot topics at Barry Slatt Mortgage’s recent Lender’s Panel luncheon. The event featured speakers from a variety of lending institutions that included Symetra Financial, StanCorp Mortgage Investors, EverBank and Thrivent Financial for Lutherans. The esteemed guests were peppered with questions about their commercial lending programs, and where they think the market is headed in the year to come. Here are the salient insights and predictions from each lender.

+ Rates will stay flat for the rest of the year. There’s a chance of continued capital markets dislocation prompted by CMBS and global factors, which would likely occur around Labor Day.

+ Lenders have a high level of liquidity going into the second half of 2016.

+ The CMBS space will likely continue to see volatility.

+ There remains significant competition among lenders for high quality low leverage requests. This is keeping rates for these conservative transactions at historic lows.

+ Lenders are focusing on top markets throughout the country that provide the best combination of population density and strong demographics.

+ Portfolio lenders continue to invest in mortgages over other asset classes. As long as fixed income yields continue to remain at all-time lows, this trend should continue.

+ We will probably see a flattening of the yield curve. The Fed will likely try one more basis hike in the range of 25 bps. The real warning sign to keep an eye out for is the inverted yield curve. It has historically been an indication that problems will arise 12-18 months down the road.