Commercial mortgage lending is expected to grow this year
A report published by the Mortgage Bankers Association reveals that commercial mortgage lending is anticipated to increase this year. This is because commercial mortgage lenders are planning to distribute more funds to meet the growing demand for this category of financing. The association surveyed the major players of the commercial mortgage lending sector, and found that they all expect the number of loan originations to be higher in 2015 than what it was in 2014. This article presents the findings of the Mortgage Bankers Association’s report.
How big is the percentage increase expected to be?
The association anticipates that commercial lending transactions will pick up by 5% or more this year. When asked about the percentage increase, 72% of the people who responded to the poll stated that their own company would likely see its lending activities surge by at least 5% compared to 2014. On the other hand, only 32% of the respondents believed that this year’s growth would be lower than 5%.
What’s the reason for the anticipated increase?
In a recent interview, Jamie Woodwell, who is the MBA’s Vice President for Commercial Real Estate Research, argued that the anticipated surge results from the fact that the ten-year loans that were distributed from 2005 to 2007 are nearing maturity. Many of those borrowers are expected to take out new loans with shorter or identical maturities. This explains why about 83% of the bank executives who were surveyed predicted that lenders are eager to give out their funds to borrowers.