Wall Street Conduit Loan
Ocean Pacific Capital has been in the commercial loan business since 1977. We have the experience needed to make getting a wall street conduit loan a smooth and easy process for the client. For more information read the following article by Tim O'Donell - a manageing director at Fanitni & Gorga, Boston, MA
"Over the last several years, the entry of 'Wall Street conduits' into fixed 0-rate mortgage lending has been the most notable development in a rapidly changing landscape. Real estate borrowers who never had anything to do with Wall street investment banks, except perhaps to open a brokerage account, suddenly found these fast-talking city slickers were competing with banks and life companies for bread-and butter loans.
The investment bankers were, of course, combining the loans they originated into pools, usually of $1 billion or more for sale to investors through public offerings. These process, flowing (figuratively through a "conduit") from origination to securitization, is a business that's here to stay. but a lot of the origination and some of the securitization have slipped away from Wall street.
This is most noticeable at the Main Street level, in loan origination. Big national banks are now using their networks of regional loan office's to originate large volumes of loans that will ultimately be securitized. Some life insurance companies, though by no means all, are writing loans using the documentation demanded by the public market-either because these lenders plan to pool and sell off the loans immediately, or because they want the flexibility to unload them later. In the long run, it may be the big banks and the life companies, with their in place origination networks and lower personnel and overhead costs, that originate the bulk of the loans ending up in the public markets.
On the securitizations side, the traditional investment banks have a competitive edge because of the large volume of non-mortgage securities they already distribute to their investor networks. But even here, the lines between different kinds of financial service firms are beginning to blur, as the federal and state regulations that have kept commercial banking, insurance, and investment banking separated are now being revoked. The big banks, insurance companies, and financial conglomerates often do their own securitizations, sometimes with the assistance of Wall Street investment housed for some aspect of the deal.
Many real estate finance professionals now question whether the /Wall street firms will remain active in the origination end of conduit financing. Some investment bankers have left it already, looking for more profitable lines of business elsewhere. But other insisted they were in for the long term, even if origination doesn't earn much in itself, they say it provided a critical mass of volume to generate underwriting and trading fees, while supporting other areas of real estate investment banking.
Conduit lending is here to stay. Though originations are off sharply from their high in 1998, a large proportion of mortgage loans will continue to follow through the conduit process to the public markets. But the phenomenon has grown for beyond the Wall street investment banks which created the business and once dominated it."
Ocean Pacific Capital funds all commercial and construction loans from $500,000.00 to $1,300,000,000.00 nationwide.
- Debt coverage ratios from 1.10 up
- Adjustable and Fixed Programs
- Loan to cost up to 100%
- Loan to value up to 90%
- 10 to 30 year Financing
If you need Commercial Monies, Equity Partners and /or Secondary / Mezzanine Financing, call our Commercial Loan Department at 1800 595-1474 or apply today for a free consultation.
