urbanSTL

rickC wrote:^add greedy mortgage companies to the blame list.

And stupid borrowers.

SoulardD wrote:...and big banks who invented 'creative financing' and are now getting bailed out from their own mess.



Calling borrowers who know nothing about finance stupid for getting a faulty home loan is like calling someone who bought a car that has problems (like any Chrysler product from the 70's-90's) stupid because they are not a mechanic.

No, it would be like someone being told (in writing) that if they bought this Chrysler product, they would have major problems within 2 years, and their monthly payment would double, but they went ahead and bought it anyhow.

SoulardD wrote:

The Central Scrutinizer wrote:

SoulardD wrote:...and big banks who invented 'creative financing' and are now getting bailed out from their own mess.



Calling borrowers who know nothing about finance stupid for getting a faulty home loan is like calling someone who bought a car that has problems (like any Chrysler product from the 70's-90's) stupid because they are not a mechanic.

No, it would be like someone being told (in writing) that if they bought this Chrysler product, they would have major problems within 2 years, and their monthly payment would double, but they went ahead and bought it anyhow.

Yeah, you're right. The fine print gave a detailed explanation of the fluctuations of the LIBOR or MTA or whatever index their ARM was based on and even predicted the future by notifying them that the index would double. The really fine print told of the coming subprime collapse and all the major players who would have problems. If only I could have gotten my hands on that fine print then I could be retired right now by predicting future markets.

Of course I'm right. If you (or anyone) didn't know what a LIBOR or MTA index is, you should have asked. If you didn't like or understand the answer, you shouldn't have signed the loan papers. Everyone is responsible for their own actions and the resulting consequences.

re: Projects Up In The Air

Original thread: www.urbanstl.com/viewtopic.php?t=5455



After posting on the above thread earlier today, I have been asked to repost my analysis of the delays in construction to the appropriate threads individually. This posting relates to the delays in funding of the major new construction and certain redevelopment projects in the Downtown Saint Louis area, which would include the Pyramid projects, such as the Laurel, as well as Skyhouse and the Ford.





That construction has stalled on all of these projects makes absolute perfect sense.



For years, the economy has been capitalizing on incredibly lax lending standards, including and especially individual mortgage holders who’ve overextended themselves. This has been further exacerbated with the secondary markets’ selling of investment products based upon collateralized mortgage obligations, basically banks selling the interests in mortgages wholesale for investment. When these collapsed, it took down hedge funds as well, to the tune of $400 billion.



This resultant full-blown collapse in the US credit markets, and now the Euro credit markets, has greatly impacted the availability of either liquid or collateralized capital that can be used to fund major expansion projects like these. We’ve had a great history of rehabilitation projects, backed by state-supported and federally-supported tax credit programs for ancillary support of financing. While these programs remain strong and aren’t expected to disappear, their role as ancillary funding sources remains. Banks are still the primary source for capital in these development projects. As banks are in the doldrums of the credit market crash (and yes, it is a full-blown crash), it’s hard to place that $50M bridge capital to a fully-occupied building.



The establishment of a base population within these buildings is what will separate these projects from being a sound investment from a purely speculative enterprise. Only with a firm foundation in actual sales and revenues will a beleaguered lending institution be able to support such an allocation.



Problems relating to delayed construction are absolutely not Saint Louis-centric. It is endemic.



These companies want to finish their projects, which remain profitable ventures for them as well as local development to our benefit. While they may have cuts in marketing budgeting expenditures, the continued sales of interests in their projects and acceptances of commitments remain. I believe we can expect all these projects to continue, although these impediments to proper funding sources mean they will have delays to final completion. During this time, we must remember to look macro as well as local.





Also, I’m new to posting on this forum; please excuse the simplistic linking at the top as I learn proper encoding procedures.

Headlines in last week's Business Journal are not good for the buyers' confidence. Right now the Skyhouse needs to hold on to every single contract they have. With no firm groundbreaking date, a self-admitted 30+ units left to pre-sell, and a drastic curtailing of sales hours and marketing, it's likely that at least a few buyers will bail. That only creates more of an uphill battle for the Skyhouse.