Similarly, in the case of private mortgages, we have witnessed an abundance of non-renewals. In many cases, private mortgage investors or mortgage investment entities feel that the loans they funded at market peak are no longer as secure in today’s real estate environment. Depending on the property location and the difference between the loan to value from loan inception and now, there are handfuls of un-refinance-able mortgages. Private mortgage lenders in these situations must decide whether they commence legal proceedings that may result in some degree of loss or enter into an arrangement with their borrowers to extend the mortgage in hopes of riding out the storm.
Simply, in the absense of a rising real estate market, lenders are scrutinizing active mortgages and contemplated fundings with a fine-tooth comb, rightfully so, which is naturally resulting in fewer options for private mortgage borrowers, particularly the high-leveraged, some of whom may not have been able to maintain homeownership for this long withour year-over-year equity appreciation and are now facing the previously disregarded option of listing and selling their home, which as previously mentioned, may net insufficient proceeds to downsize or rent.