This industry is growing its share of the mortgage business
As investment yields have weakened, some of America’s largest insurance companies have been increasing their share of the mortgage market.
Insurers owning real estate is nothing new, neither is their lending to (especially commercial) borrowers, but their heightened interest is part of a widening of the sector’s portfolio as low interest rates provide weak returns on other options.
Bloomberg reports that the insurance sector boosted mortgage funding by 50 per cent in the last decade to $430 billion and last year MetLife made more property loans that ever before in its 148-year history.
Doug Dachille, chief investment officer of AIG commented: “Given the lack of liquidity in the securitized markets, which is how many insurers have previously purchased loans, insurers are now waking up to the reality that it’s better to own the loans directly.”
Fed official calls for caution on interest rates
Mortgage rates should avoid upward pressure from the Fed until at least the end of the year if the Fed continues its dovish tones.
New York Fed president William Dudley said Monday that with some concerns remaining over the US economy including external factors, the central bank should be cautious about a rate rise too soon.
Speaking in Bali, Dudley said that the economy should exceed expectations by the end of the year, but his comments have been interpreted as largely ruling out a September interest rate rise and making December the next real possibility.
Manhattan high-rise residents launch $67 million lawsuit
Residents of a high-rise condo building in Manhattan have filed a $67 million lawsuit against developers claiming that the luxury homes they were promised is a long way from the reality.
In the Manhattan Supreme Court, the residents allege that the 24 story building has multiple dangerous code violations and unfinished work, the New York Post reports.
Developers Alexander Gurevich is named in the suit which states that it “represented to prospective purchasers that the Turtle Bay condominium and its units would be of a premier luxury caliber and would be designed and constructed with the highest quality of materials and workmanship…However, this was not the case at all.”
Residents also claim that the initial condo board did not pay utilities for 5 years. Gurevich did not comment when contacted by the Post.