WESTCAP MARKET UPDATE & FED OPEN MARKET COMMITTE SUMMARY

The FED announcement today was very interesting, even more so were the reactions in stocks and bonds. Moments before the announcement broke, the DOW was down 94 points, the 10-yeat Treasury was down 8 bps at 1.98%, and oil was $43.46/brl. Within moments of the breaking headline that the FED had removed the word "patients" from their intent to raise rates, the DOW was up 116 and the 10-year moved up to 2.04%. Janet Yellen then spoke and explained the FED's action and position, calming market concerns of a June rate increase. The DOW closed up 227 and the 10-year at 1.95%, down 11 bps for the day. The following is the text of the FED announcement: 

http://www.benzinga.com/news/15/03/5338019/fed-statement-text

I listened to Janet Yellen's press conference, during which she indicated that "patients" did not mean that the FED was going to raise rates in June. She indicated that the Fed is seeing "more slack in GDP than they have previously seen", it will be "appropriate" to raise the Fed Funds Rate target when the committee has seen improvement in labor market (they are targeting 4.9% - 5.1% unemployment in 2016 v. 5.5% presently), and when it is confident inflation will move toward the committee's 2% target (.2% in January and has been inside the FED target for 33 straight months).

I find it interesting that Yellen did not refer to the real unemployment rate (U6), which she has indicated concern about up to this point, although she did indicated that there are multiple indicators they look at in the unemployment numbers. That has to remain a concern as U6 presently stand at 11%. I believe that although she did not refer to U6 directly, that this will continue to be a main driver which will likely see the FED hold off on raising the FFR until late 2015. We'll see.

http://www.portalseven.com/employment/unemployment_rate_u6.jsp

The following is an excellent summation of the FED actions and Yellen's comments: http://finance.yahoo.com/news/video-fed-bid-decouple-global-000240734.html;_ylt=AwrSyCUM2QpV5nAAJq.TmYlQ

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FORWARD COMMITMENTS

Within the past month, we have locked rate on several forward commitments, including two as low as 3.75% fixed for 10 years and amortized over 30. If you have a refinance coming up within the next 12 months I would be glad to talk to you about our life company "forward programs".

INTEREST ONLY

We are also seeing some of our life companies provide 1 to even up to 10 years interest only payments on 10-year fixed rate loans, which is completely dependent upon leverage.

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WESTCAP offers the ability to obtain loan sizes ranging from $1,000,000 to $250,000,000 nationwide.

WESTCAP provides fixed and floating rate debt programs for a variety of loan terms and purposes including long term permanent loans, short term permanent loans, construction loans, mezzanine loans (including construction mezzanine loans), bridge/rehab loans, as well as joint venture equity placement for all types of income properties including:

Multifamily
Senior Housing 

Hospitality
Industrial

Office
Medical Office

Retail
Self-Storage

Student Housing
  

WESTCAP serves as a correspondent to 17  life insurance companies and other sources of capital in order to meet all of our client's financing needs. Most of these correspondent relationships date back over 25 years, including Sun Life of Canada for which we have been the exclusive correspondent in Southern California for almost 30 years.

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I am always available to discuss potential financing and or equity requirements, or to  provide a written quote to help convince a seller that you, or your client, are the most qualified buyer.  I will also handle any size transaction, as we are interested in establishing long-term relationships as early as possible.

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Steve Bridges
Executive Vice President
WESTCAP CORP
9960 Irvine Center Drive
Irvine, CA 92618
Office: (949) 387-9061  Cell: (949) 235-1540
sbridges@westcapcorp.com
www.westcapcorp.com

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CA RE Broker: 00465840