Monday, February 10, 2014

Real Estate Innovation in the Face of Federal Regulation

The LA Times goes over some of the recent innovations in the real estate market, despite increasing standardization imposed by the Feds:

Despite the recent spate of far-reaching federal regulations hammering the mortgage business, innovation is far from dead. For example, one of the nation's largest credit unions now allows borrowers to reset their rate at no cost up to five times over the life of the loan. A Beverly Hills company has created a way for small investors to put their money in commercial real estate deals that are usually reserved for wealthy individuals. There's also a new online search tool that allows homebuyers to identify and compare houses for sale based on drive times to work and other places, night and day. 

The rate protection feature is offered by the Pentagon Federal Credit Union, a 1.2-million-member institution headquartered in Alexandria, Va. It is available on the credit union's 5/5 adjustable rate mortgage, which adjusts to the then-market rate every five years over the 30-year term. [...] The new investment vehicle comes from Realty Mogul, which calls it "crowdfunding for real estate." The Southern California company creates an online marketplace for accredited investors to pool their money and buy shares of office and apartment buildings and retail centers, and gives developers access to a broader pool of capital.

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