Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Jul 20 1992 Date: Mon, 20 Jul 92 04:12:10 EDT Message-ID: 07-20 0000 DECISIONLINE: Real Estate USA TODAY Update July 20, 1992 Source: USA TODAY:Gannett National Information Network INDUSTRY TAKES TO RESTRUCTURING: Battered real-estate borrowers and lenders are seeking negotiated solutions to their mutual problems, the accounting firm Coopers & Lybrand says. A record number of lenders are restructuring loans to hard-pressed developers by reducing the interest rate, extending repayment deadlines, or both. The motive for both sides is an urgent desire to avoid default. (For more, see special Restructure package below.) REVERSE MORTGAGES STILL POPULAR: Reverse mortgages continue to grow in popularity. Private lenders have made more than 9,000 reverse home loans during the past three years, up from 2,064 in 1987-1989, says the National Center for Home Equity Conversion. Reverse mortgages let a homeowner borrow against the equity in the home, which is sold after the homeowner's death to repay the loan. PRIVATE LENDERS TAKE UP CAUSE: Most reverse mortgages are made by public agencies, but more private lenders are entering the market. For information on reverse loans, write to NCHEC, 1210 E. College Drive, Suite 300, Marshall, Minn. 56258. Or for a free guide, Home-Made Money, Consumer's Guide to Home Equity Conversion, send a postcard to AARP Home Equity Information Center, 601 E St. N.W., Washington, D.C. 20049. PEROT DEEP INTO AIRPORT PROJECT: Ross Perot, who pulled out of the presidential race last week, likely will turn to his Alliance Airport project, a real estate development in Texas. Perot and his son own more than 17,000 acres in and around Alliance and want to turn the airport into a hub of industrial sites, office parks, research facilities, shopping centers and residential subdivisions. MORTGAGE RATES DROP: Mortgage rates fell again last week, to an average 8.09% on 30-year fixed-rate loans from 8.13% a week earlier, the Federal Home Loan Mortgage Corp. says. The average one-year adjustable rate fell to 5.5% from 5.56%. CONSTRUCTION BUDGET SLASHED: Louisiana Gov. Edwin Edwards slashed more than $176 million from the state's $1.8 billion capital construction budget before signing the measure. Cited: The projects cut had not been reviewed by the proper agencies prior to making construction recommendations. INDIANS WANT TO BUILD CASINO: The Narragannsett Indian tribe has unveiled plans to build a Las Vegas-style casino on tribal lands in Charlestown, Rhode Island. The $20-$40 million casino would provide 2,300 jobs and boast a $50 million annual payroll, a tribe spokesman said. UNIVERSAL HEATH RIT INCOME DOWN: Universal Heath Realty Income Trust has announced that cash flow per share available for distribution for the quarter ended June 30, 1992, was $.49. That's down a penny from the same period in 1991. The trust said it anticipates it will make the initial funding of a construction loan for a medical office building and hospital expansion within the next few weeks. PHYSICIANS ARE RELOCATING: BMI, a health care targeting information service, has released figures showing a 27.6% increase in the number of physicians who are considering relocation. Based on responses derived from surveys distributed with the 1992 Physicians Desk Reference, an average of 9.6% of physicians indicated that they are considering relocating. SPECIAL PACKAGE ON RESTRUCTURE: LOAN NUMBERS DOUBLE: Restructured loans now account for about 4.5% of the total amount outstanding in commercial mortgages, nearly double the total in 1989, says accounting firm Coopers & Lybrand. Borrowers and lenders are trying to avoid default. Restructured loans on retail properties, such as shopping malls, have tripled since 1990. In restructuring, lenders may alter loan deadlines or interest rates. BALLOON LOANS TROUBLESOME: Lenders face a wave of balloon loans - mortgages in which all of the principal comes due at once, usually after five years. Billions of dollars come due this year and next, and most developers can't repay them. Many can't even make interest payments. Restructuring helps both sides. Developers avoid bankruptcy, and lenders avoid declaring huge losses, as they must do on foreclosed loans. `MOST ATTRACTIVE OPTION': The faltering economy is partly to blame for the rush toward loan restructuring. Developers facing economic problems are having trouble repaying balloon loans, and "loan restructuring is the most attractive option available, given the economic climate," says Bjorn Hanson, head of Coopers & Lybrand's real-estate group. (End of package.) Real Estate Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM