The FED Chairman announced a future reduction of bond purchasing and the ultimate ending of Quantitative Easing. An end to excess monetary liquidity. Interest rates surged as stocks fell.

Scottsdale, AZ -- (SBWIRE) -- 06/24/2013 -- Last week FED Chairman Bernanke said that the FED would start to reduced bond purchases, quantitative easing, later this year and end the program sometime next year. There had been talk of a tapering in the news for several weeks. This was a clear statement that Fed policy is shifting. The former target of 6.5% for unemployment and under 2% inflation appears to be less important now. Bernanke mentioned an improving economy and the possibility of 3.5% growth for the economy. This shift in Fed speak is surprising and comes only a short time after reaffirming the prior landmark. Yes we are seeing a small improvement in economic activity, however unemployment continues to be in the mid 7% range. My opinion is that economic growth of 2% to 2.5% is more likely at this time.

The real question is what has caused this shift in FED policy. The answer, in my opinion, is that the FED has come to the realization that there is not going to be any fiscal policy changes from the Congress to stimulate the economy. Monetary policy alone can only do so much to grow the economy. Without a stimulative fiscal policy, pump priming spending by the government. After a time monetary easiness can begin to have a deleterious effect. We may be getting close to that point. Therefor the shift by the Fed. It is a recognition that excess liquidity has been going into financial assets and not into productive assets that increase economic activity and employment. The building of a possible liquidity balloon.

Last week the 10 year Treasury, the bench mark for commercial mortgage lending, went over 2.5%. That was the highest rate in almost two years. The question is what we can expect in the months ahead? This should not be a surprise. We have been saying that the low-interest rates of the last year or more would not continue on indefinitely. However, we do not think that the interest rate market will run away. The FED can not allow things to get out of "control" too much. Yes, we do not expect that we will see the lows again, but we do not expect that things will skyrocket. We are looking to an orderly increase in rates over time. That is the trend in rates will be up in a slow controlled environment. We do expect some retracing in rates over the short-term. What this means to property owners is that you should not delay financing. The direction of the market for interest rates is up and waiting is not prudent said Victor Weintraub, President of First Charter Financial Corporation

So far as other financial assets are concerned, we expect that the direction is down for now for stocks and other financial assets. These have been reeling from the realization by the financial press and some investors that the normal expectations are now changing. It will take real economic growth to stimulate financial assets.

About First Charter Financial Corporation
A leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial properties throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of two million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub, President of First Charter Financial, is a noted economist and has been in the mortgage business for over forty years. Contact First Charter Financial with your commercial mortgage needs. Email info@fcfcorporation.com Telephone (480) 970 0990.

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Scottsdale, AZ -- (SBWIRE) -- 05/28/2013 -- The FED has been purchasing $85 billion of debt securities every month, Treasuries and mortgage-backed securities. They had said that this would continue until the rate of unemployment dropped, with a target of 6.5%. Although there has been some slight improvement in the employment situation the current unemployment rate of 7.5% is still a long way from the target. The economy has not been strong. First quarter GDP showed an increase of 2.5%. That was below the 3.5% expected by many economists. That was before the negative drag that will come from the "sequester" spending cuts. My expectation has been for a 2.5% GDP growth for the year. I think that my target will be difficult to achieve.

The FED, under the chairmanship of Bernanke has been very open. He has been very different from prior chairmen. He has tried to avoid surprises by having monetary polices well announced in advance. The question is why, in the face of an economy that is not close to robust, are we hearing talk of a tapering of the aggressive monetary policy that has been in place for some time now. There can be only one answer and that is the fear of inflation. Until now monetary policy has been focused on increasing liquidity in the economy. The objective was to try to stimulate economic activity. There has been some success in this direction, however monetary policy alone can not do the job. Fiscal policy is needed to help in creating demand. Increased federal spending has not been forthcoming as a pump primer. The result of the increase in liquidity is that money has not gone into job creation. Instead we have seen increases in securities values and in Real Estate values.

I am not suggesting that this is bad. What I am saying is that the FED may be looking down the road at some increase in inflation. When the FED buys Treasuries and mortgage-backed securities, backed by the government, its is simply printing money. In an expanding economy that can be handled without too much inflation. In a slow economy it can lead to increased inflation. How is inflation contained? By increasing interest rates. If the FED starts to taper their securities purchasing, interest rates will increase. When that happens capitalization rates go up and values go down, a double hit. In addition securities prices will top.

About First Charter Financial Corporation
First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial properties throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub, President of First Charter Financial, has been in the mortgage business for over forty years. He is also a noted economist. Contact First Charter Financial with your commercial mortgage needs. Email info@fcfcorporation.com Telephone (480) 970 0990.

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

The US economy is weak and struggling to recover. With only 88,000 new jobs created in March, it is the worst number since June of last year. The Unemployment rate was reported as 7.6%. That is a 0.01% improvement. However this was due to people leaving the work force and not economic improvement.

Scottsdale, AZ -- (SBWIRE) -- 04/08/2013 -- All of this is happening before there has been any time for the "Sequester" to hit the economy. What this suggests is that the economy is still in difficulty and unemployment will remain in the current range and could get worse.. The "Sequester" will cause job losses ahead. The bond market has reacted positively to this news. The 10 year Treasury, the benchmark for commercial mortgages has fallen to 1.73% as this is being written.

There is a new wrinkle in the monetary landscape. Japan has started to copy our monetary policy. The Bank of Japan has started an aggressive program of asset purchases. These include not only bond purchases but also exchange traded funds and real estate investment trusts. This is different from what our FED has been doing. The FED has been buying bonds and letting the markets put excess reserves into other places. The Bank of Japan is just doing it directly. They have stated that they are setting an inflation target of 2%. They have had some deflation. Proportionately what they are doing is several times larger than what our FED is doing.

The old saying is "Money is the root of evil". Easy monetary policies like our FED and the Bank of Japan are doing is the root of inflation. At some point in the future there will be inflation. At some point in the future there will be much higher interest rates.

Take advantage of the low-interest rate world of today. Refinance any properties that you can. There will be a change in the future. It could happen fast and surprise everyone. It may be tied to something as simple as confidence.

About Victor Weintraub
Victor Weintraub, a noted economist and author, is president of First Charter Financial Corporation a leading independent mortgage company. First Charter conducts business on a nation wide basis and arranges financing for commercial properties throughout the US. The projects that are handled include office, retail, multifamily, hospitality and specialty properties. Loans amounts range from a minimum of one million dollars up to as large as 100 million dollars. First Charter maintains relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and is very active with capital markets funding sources. Contact First Charter Financial with all of your commercial mortgage needs. Email info@fcfcorporation.com Telephone(480)970 0990

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Refinance commercial real estate now. At some time in the future interest rates will go up and the opportunity to lock in low rates will be lost.

Scottsdale, AZ -- (SBWIRE) -- 03/11/2013 -- Last Friday the Labor Department released the Employment Report for February. It was stronger than was expected. Job creations increased by 236,000, better than the 171,000 that was generally expected. The Unemployment Rate declined to 7.7%. There were some revisions to prior months, January down and December up. It was an improving report and there were cheers from Washington and from the financial press. The stock market continued to climb to new highs while the ten-year bond, the benchmark for commercial mortgage interest rates, increased several basis points in yield.

The record low interest rates that we have been enjoying are the result of an easy money policy from the Federal Reserve. Each month the FED has been purchasing $85 billion of securities. $40 billion of mortgage backed paper and $45 billion of US Treasuries. They have told us that they will continue this policy until the unemployment rate drops to 6.5% and while inflation remains at their 2% target. They have been pumping money into the financial system. The result is low interest costs.

The financial collapse that occurred in 2008 and 2009 is almost the same as the collapse that occurred in 1929 and 1930. That resulted in deflation and the depression of the 1930s. When the FED purchases Treasury securities and federally guaranteed mortgage backed securities it is like printing money. That is very inflationary. They have made the correct choice. The risk of future inflation is far better than to have deflation and a full blown depression. It is the FED pumping liquidity into the banking system and the economy that has kept the economy functioning. The liquidity has not yet caused commodity or wage inflation. The flood of liquidity has resulted in inflation in the stock market where prices are hitting new highs in spite of our weak economy. Housing prices have also benefited from the extra liquidity and the availability of mortgage funds.

When the Employment Report was released last Friday and indicated an improving economy, some people reacted to the fear that the FED was closer to reversing their monetary policy. That is not close yet. It will be quite some time before we begin to get close to the target of 6.5% unemployment. Also the economic negative of the sequester has not yet been felt.

Having explained the economy in simple terms you must get the very important message that at some time in the future the American economy will recover sufficiently to bring down unemployment and to begin to show accelerating inflation. That is when the FED will reverse the easy money policy. That will be the time when interest rates will go up very rapidly. It will also be the time when the stock market will top out, housing prices will top out and the declining cap rates of commercial properties will reverse.

We do not know when this will take place. It, however, will take place and interest rates will go up substantially. If you have properties that you can refinance at this time it is very prudent to do so. There is no question that interest rates will be higher in the years ahead and waiting can be dangerous. Take advantage of the low interest rates of today. Refinance any properties that you can. First Charter Financial can evaluate your properties and give you financing guidance.

About Victor Weintraub
Victor Weintraub, a noted economist and author, is president of First Charter Financial Corporation a leading independent mortgage company. First Charter conducts business on a nation wide basis and arranges financing for commercial properties throughout the US. The projects that are handle include office, retail, multifamily, hospitality and specialty properties. Loans amounts range from a minimum of one million dollars up to as large as 100 million dollars. First Charter maintains relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and is very active with capital markets funding sources. Contact First Charter Financial with all of your commercial mortgage needs. Email info@fcfcorporation.com Telephone(480)970 0990

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Cash flow available for debt service along with the quality and stability of that cash flow are the critical factors. When we size a loan and prepare it for submission to a lender we always present it based on cash flow. Cash basis accounting and accrual accounting are different worlds when it comes to underwriting and placing a commercial mortgage.

Scottsdale, AZ -- (SBWIRE) -- 02/12/2013 -- When a client sends us a loan package we go over the operating statements in detail. Usually we will talk to the client's controller or accountant and have the operating statements restated. Typically we will remove non operating expense items such as depreciation and amortization. We will remove capital items that are being expensed such as leasing commissions and tenant improvements and renovations. These differences occur because accrual accounting tries to reduce income and reduce tax impact. Cash flow accounting tries to establish the maximum funds that are available to service debt. The value of all commercial properties, retail, office, industrial and multifamily comes down to the capitalization of the free cash flow that the property generates.

We underwrite every loan internally before it goes to any lender. That way we anticipate what the lender is going to ask and look for. Underwriting has changed from just a few years ago. We still look at debt service coverage. We still look at loan to value ratios. We now also look at debt yield. Then we look at the stability of income and the credit quality of rental income. Higher vacancies are acceptable. The parameters have changed some. We decide what potential lender or program would be interested in this kind of property. Then we call the lender and discuss their parameters. That way the lender has a heads up on the loan package and is expecting it.

Compared to a few years ago, in general, today, loan to value is lower. Interest rates are lower so debt service coverage is easier to achieve as is debt yield. There are two important factors that many borrowers are not aware of. First capitalization rates for quality properties are down. We have cap rate compression because investors are seeking yield. Second we can do loans for properties that are not 100% rented. Some vacancies are acceptable. The important factor is stability and quality of income.

Commercial mortgage interest rates are near historic lows. There is abundant funding available. It is prudent to take advantage of the current mortgage market. Locking in the low rates of today for an extended period makes good business sense. First Charter Financial can evaluate your real property financing needs and suggest advantageous financing.

About First Charter Financial Corporation
First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial properties throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub, President of First Charter Financial, has been in the mortgage business for over forty years. He is also a noted economist. Contact First Charter Financial with your commercial mortgage concerns. Email info@fcfcorporation.com Telephone(480)970 0990

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

The cost of money and the return on invested capital are the most important factors that influence the success of any business. The reason why interest costs are so low, what to expect and the action to take are critical in these unusual economic times.

Scottsdale, AZ -- (SBWIRE) -- 01/24/2013 -- Conventional wisdom says that when there is a recession the FED should lower the cost of money and increase liquidity in the money market. Since the start of the current recession and the financial markets collapse in 2008 and 9, that is what the FED has done. Rates were lowered continuously to the point that short-term rates are effectively 0. The market is awash with liquidity. The conventional wisdom has not worked. Nominal unemployment is still in the high 7% area. With over 4 million of chronically unemployed, more than one year, real unemployment is higher. The economy has recovered some but is not where it should be four years after the start of a recession.

Our economy is dealing with something very different from the usual style recession. The economic rules have stopped working. Some economists have named this situation a "Liquidity Trap", when increasing liquidity massively, along with reducing the cost of money, does not stimulate the economy much. This has happened only two times in well documented economic history. The first was the great depression of the 1930s. The second was the economy of Japan in the 1990s.

The FED has already told us that they will continue their policy of high liquidity and low-interest rates until the unemployment rate gets down to 6.5%. The way the economy is going now that will take quite a long time, several years. The one thing that could speed up the pace of a recovery is a jobs program from the federal government. What this comes down to is that monetary policy alone can not do the job. It is going to require a fiscal spending program. Given the political situation in Washington that is a major problem.

Now that you have a basic understanding of the economic problems facing us, you can do some planning for the future direction of your business. Mortgage interest rates are low and they are likely to remain low for a while. But, with the short-term rates at effectively zero it is not likely that they will move much lower. At the time in the future that it appears there may be a jobs program to stimulate the economy, that should be your signal that higher rates are ahead. Based on this information now is a very good time to do some financing and lock up these low rates. Commercial mortgage rates will not go lower. At some time in the future they will be higher.

First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial properties throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub, President of First Charter Financial, has been in the business for over forty years. He is also a noted economist. Contact First Charter Financial with your commercial mortgage concerns. Email info@fcfcorporation.com Telephone (480) 970 0990.

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

Washington sends us from one economic crisis to another economic crisis. What is the impact of the debt ceiling on commercial real estate and your ability to operate your properties and to optimize your financing.

Scottsdale, AZ -- (SBWIRE) -- 01/14/2013 -- The Fiscal Cliff went out with a whimper. We read in the papers and heard on TV that the consequences would be horrendous. It was supposed to clobber our economy and hurt the economic recovery. In the end, as I said would happen in my December news letter, nothing really happened. There were some changes in tax policy. These hit the highest income people. All the other issues were put on hold and will be new economic crises later in the year. Kicked down the road.

Now the next pseudo crisis is the debt ceiling. The President has said that this is something that is not negotiable. The radical, no spending Republicans, say that they won't let an increase in the debt limit be approved. This is like charging something on Uncle Sam's credit card and then saying that you are not going to pay the bill. The threat of not increasing the debt limit is to hold the credit of the United States hostage. It is a threat of destroying the credit of our nation. It is totally ridiculous and unacceptable. It is Congress who authorized the spending. Playing this kind of game is juvenile.

So the question is what is going to happen and how you should plan for your business looking forward. The one important thing that we did learn from the Fiscal Cliff experience is that when it does get down to the deadline, neither side wants to be seen as the one who caused an economic wreck. In the end the debt limit will be increased by enough to again delay the conflict for six months at the least. The Republicans will give in. They will try to put out some face saving compromise language.

We expect the economy to continue the modest recovery. We are expecting economic growth to be around an annual rate of 2.5% for the first quarter of 2013. From our perspective this means continued but slow improvement in leasing activity. We expect inflation to be tame. Operating costs should continue to be restrained.

Commercial mortgage interest rates should continue around where they have been. The bell weather for mortgage interest rates is the 10 year Treasury. Over the past several weeks we have seen a small upward blip in these rates. We do not expect to see the rate of the 10 year Treasury to move much over the next few months. The most important factor impacting this rate is the action and the policies of the Federal Reserve. The Fed has been very accommodating and we expect that they will continue this policy.

Commercial mortgage interest rates are near historic lows. There is abundant funding available. It is prudent to take advantage of the current mortgage market. Locking in the low rates of today for an extended period makes sense. First Charter Financial can evaluate your real property and suggest advantageous financing.

First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial propertied throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub, President of First Charter Financial, has been in the business for over forty years. He is also a noted economist. Contact First Charter Financial with your commercial mortgage concerns. Email info@fcfcorporation.com Telephone (480) 970 0990.

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

There is a lot of hype on TV and in the news from people who have no knowledge about the economics involved and the timing and gravity of the situation. It makes good headlines and captivates audiences but it really doesn't amount to much. It is not even a slippery slope said Victor Weintraub, noted economist and President of First Charter Financial Corporation.

Scottsdale, AZ -- (SBWIRE) -- 12/13/2012 -- The two major components of the "Cliff" are first the expiration of the Bush tax cuts. This will result in a tax increase, more on upper income people, and an increase of the marginal tax rate. The other major component is the "Sequester". This will result in cuts to defense spending and to some entitlement programs. The other components are the expiration of extended unemployment insurance and the end of temporary payroll tax cuts. You must recognize that when President Clinton raiser taxes unemployment went down from 7% to 4%, the economy expanded rapidly and the budget went from a deficit to a surplus. Earlier this year I published a study that establishes a positive correlation between increased taxes with an increased marginal tax rate and an expanding economy and declining unemployment. Contrary to what a lot of commentators and politicians say, increasing taxes and especially the marginal rate will stimulate the economy and reduce the deficit. Do not fear a tax increase.

The "Sequester" will cut the defense budget. It is way out of a rational relationship with our economy and our defense needs and should be cut to balance the budget. So far as social and entitlement program cuts, I do not think that will really last.

It appears to me at this time that there will not be any agreement in Washington. I expect that we will go over the "Cliff". When the new Congress takes over in January, then we will see some adjustment of middle class taxes, some restoration of entitlements and a spreading out of defense cut. We will have turned the corner toward restoration of our economy and a boost to the middle class.

First Charter Financial Corporation is in the business of advising our clients on their financing needs and placing Commercial Real Estate Financing for them. It is my opinion that we will see continued but slow improvement to the economy. This will be reflected in improved occupancy and leasing activity. I expect to see interest rates remain very low and that the availability of funds for commercial mortgages will remain liquid. From a historic standpoint this is a very advantageous time to finance property and to lock up rates for as long as possible.

First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial propertied throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub is the President of First Charter Financial and has been in the business for over forty years. Contact First Charter Financial with your commercial mortgage needs and concerns. 480 970 0990. Email Info@fcfcorporation.com

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm

“I have been in this business for over forty years and I have never seen interest costs as low as they are today.” Said Victor Weintraub, President of First Charter Financial, a nationally recognized mortgage firm.

Scottsdale, AZ -- (SBWIRE) -- 10/24/2012 -- Now is the best time to refinance commercial Real Property. The opportunity to save very important money is here now and it will not last forever. Wise property owners will take advantage of the historically low interest rates that are available today. There is the opportunity to have real cost savings for the next ten years by refinancing into a new fixed rate mortgage now.

It is the result of "Quantitative Easing" by the Fed. Liquidity in the monetary system has forced interest rates down and swelled the availability of loan funds. The slack economy also plays a part in the present capital markets situation for commercial properties. Interest costs for many classes of commercial properties are in the mid four percent range and multifamily interest costs are well below three percent. Easily two percent below where interest costs were just a few years ago. A saving of two percent on interest cost equals $20,000 for each $1 million of mortgage. A $10 million mortgage would yield a real cash savings of $200,000 yearly. That is important money.

First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial propertied throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub is the President of First Charter Financial and has been in the business for over forty years. Contact First Charter Financial with your commercial mortgage concerns. 480 970 0990.

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm