Good news and bad news in the May numbers.

Commercial lending is slowly showing improvement. There were twelve commercial mortgages securing loans in excess of one million dollars recorded in May. More broadly, there were thirty mortgages over $500,000 recorded in April and May of this year. Last year in April and May there were only fourteen such mortgages. This increase confirms anecdotal evidence that I’ve heard. Some banks―but not all banks―are making commercial loans in well qualified situations. A welcome sign of improvement.

The residential side of the market is still very soft. Our mainstay barometer of market activity is recorded mortgages securing between $50,000 and $500,000, as these most often represent residential first mortgage transactions. Only 497 such mortgages were recorded in the last two months. This is the lowest April/May total in the fifteen years that we’ve been providing our report. We seem to be in yet another “interest rates will never be this low again” market. Yet, consumers are not paying attention. Or more likely, they may be unable to qualify under today’s standards.

The oppressive effect of regulatory and underwriting excesses is clearly taking its toll. According to a recent article in the Wall Street Journal, loan application rejections increased to 26.8% of all applications at the nation’s ten largest mortgage lenders in 2010. It would be hard to argue that increased rejection rates are not reflected in our own market. The numbers don’t lie. Hopefully, at some point, government officials and regulators will come to their senses. Without a strong housing sector, there’s little hope of the country enjoying a robust economic recovery.

On a more positive note, our acquisition of Meridian Title’s Bloomington office is transitioning well. I’ve attached a recent update for those who may have missed it. At this point, I can’t imagine how things could be going better. Thank you to all who offered their congratulations and well wishes. All of us here at John Bethell Title truly appreciate that.

~John Bethell

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