Banker & Tradesman May 30, 2016

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A Publication of The Warren Group CREDIT AVAILABILITY

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CREInsider The

Jumbo Loan Availability CONTRACTING NATIONWIDE, BUT NOT IN STATE

A SUPPLEMENT TO BANKER & TRADESMAN SEED MONEY

Lenders Competing For Jumbo Loan Business

Cannabis Growers Scout Industrial Sites

BY JIM MORRISON | BANKER & TRADESMAN STAFF

Risk Clouds Financing Climate

T

he availability of jumbo loans across the country dropped 1.4 percent in April, but lenders are still competing hard to make jumbo loans in the Bay State. Conventional mortgage availability increased slightly in April, but overall mortgage credit availability decreased due largely to the decreased availability of jumbo loans, according to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI). By that index, the market had a score of 100 in 2012. At the height of the boom in June 2006, the MCAI scored an 859. The MCAI decreased 0.89 percent to 122.4 in April 2016 from the previous month. According to the MCAI, mortgage credit has become gradually more available since 2012. “Mortgage credit became less available in April as a result of two opposing trends, resulting in a net decrease to the index,” Lynn Fisher, MBA’s vice president of research and economics said in a statement. “Investors continued to roll out Fannie Mae and Freddie Mac’s low down payment loan programs, which had a loosening effect on credit availability. However, this was more than offset by tightening among high balance and jumbo loan programs.” In a telephone interview, Fisher said the key to interpreting the index is understanding that it tracks the supply of the loans, not the demand. “We’re tracking both the number of programs, as well as the relative riskiness of those programs,” Fisher said. “The index is a combination of how many offerings there are and there were simply fewer offerings nationwide.”

Larger Lenders Compete For Jumbos

According to Inside Mortgage Finance, a mortgage industry newsletter, “One of the biggest factors limiting the issuance of jumbo mortgagebacked securities is the strong appetite banks have to hold jumbos in portfolio.” Larger lenders have more assets and can afford to hang on to jumbo mortgages, which is more profitable than securitizing them. Because

BY STEVE ADAMS BANKER & TRADESMAN STAFF

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ix medical marijuana dispensaries are open for business in Massachusetts and with the emergence of the industry comes the need to secure large-scale growing facilities for thousands of pounds of product annually. Along with 11 dispensaries that have received provisional state approval, they’ve secured 13 properties from Northampton to Plymouth for cultivation. Some are paying rents nearly five times the going rate to lease warehouse space. Up to 35 dispensaries eventually could be permitted statewide under the 2012 law legalizing medical marijuana. And a statewide ballot question in November could legalize recreational marijuana use, authorizing 75 retail licenses and another 75 cultivation facilities in the first year. Continued on Page B6 TURNING THE TABLES

Casino Developers’ Playbook Bucks Conventional Wisdom

Casino Developers Not Waiting Out Litigation BY SCOTT VAN VOORHIS BANKER & TRADESMAN COLUMNIST

Continued on Page 8

W CONTENTS

Residential �������������������������������������������������������������� 8

Points ����������������������������������������������������������������������� 4

In Person ������������������������������������������������������������������ 5

CRE Insider ������������������������������������������������������������ B1

By The Numbers ������������������������������������������������������� 6

Banking & Lending �������������������������������������������������� 7

Records Section ������������������������������������������������������ C1

hen your business is gambling and you have more money than the old man upstairs, you have the option to do something most developers only dream of. You can thumb your nose at pesky project opponents and start building, brushing off lawsuits and appeals as if they were so many fleas. Such is the case with Las Vegas billionaire Steve Wynn and his planned Everett gambling resort and the Mashpee Wampanoag Tribe, soon to be flush with its own mountain of casino winnings. Continued on Page 3


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