“DISTRESSED REAL PROPERTY SITUATION” Mortgage Lenders be aware! (My Perspective to Bankers eye’s- An Open Discussion)

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First and foremost I would like to share with you some gist of Real Estate (A,B,C, Ds in Real Estate Issues).

Due to the deterioration in local economic conditions, such as unemployment because of layoffs, plant(s) and companies closings, market downturn and the alike may lead to an increase in the number of distressed properties available for sale in the market, mainly caused by both Fiscal and Monetary Policies (Contractionary Fiscal and Monetary Policies as it has been applied in the Economy).

Why Distressed Property Situation and the big outcry in the country (In Tanzania)?

Distressed Real Property Situation is the condition or situation whereby Real Properties are sold or rented below current market prices.

Reasons for this situation;

a). Borrowers (Mortgagees) inability to make mortgage payments

b). Market value of the property fall below the outstanding mortgage balance (Real Properties are said to be “Underwater” or “Upside Down”)

c). Delinquent Real Property Taxes or Real Property Tax liens

d). Civil Judgment or Bankruptcy or Divorce

e). Mechanics or Construction Loan Liens

f). Personal Debts et cetra

What ought to be done?

We have devised a permanent solution to help banks and other mortgage lending institutions to curb the situation which would have a positive impact in their financial dealings and revert the situation in mortgage lending practices. For further inquiries you may in bobo georgepeter@terranova.co.tz I will be more than happy to share with you.

NB: Many people are looking and consider only to some few categories of Real Estate/ Real Properties for instance commercial properties and residential properties such as houses, apartments, villas, bungalows, plots, farms are the only categories of Real Estate, but the fact that Real Estate is so much diverse including Industries “Industrial Real Estate”, Orchards, Farmland et cetra also are amongst the categories of Real Estate, so when one comes to measure performance of the Real Estate in their portfolios even to some great extent they don’t use “benchmarks” which is very important, they only use “Intuitive judgment” rather than “Experts Opinion” you find that they are talking about the former whilst neglecting the latter “Industrial Real Estate” which is currently gaining impetus due to industrialization policy blessed by the Government. You may realize and weigh according to investors perspective more motives are geared to investing in “Industrial Real Estate” currently in disfavor of Residential Apartments, Commercial office Blocks/ Buildings, Villas, Bungalows etc.

Investors’ appetite has been shifted to Industries and every one of us is a witness that Industries are increasing at the rate of Arithmetic Progression and this is due to government incentives and promotion towards industrialization in Tanzania.
 
Economies deterioration lead to all shits.

Best way to attract and boost is to align with the industrialization policy since it is easy to get a piece of land( almost free) once you write serious business plan to run or establish certain industry as per policy.
 
What you have said have actualized today in the auction of Lugumi's mansions. The highest bidder fell short of the market price!
 
It almost 50% value felt down of all real estates as it witnessed, and Role of Government played since 2015 by implementing tight monetary and fiscal policies., And this consequently lead to land value deterioration against Loan security status where by single loan is backed twice by different real estate.
 
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