Real Estate Guru Cautions Financial Institutions..

Real Estate Broker, Anya Levy, is cautioning financial institutions about irresponsible lending, observing a certain current trend in which some are offering mortgage products with overexposed risk.

Levy pointed to one mortgage institution, which she did not name, which is offering mortgages of 110 per cent a reckless undertaking in her view as this is overexposing, if not overlending.

Speaking at the Sygnus Business Breakfast panel discussion last week, Levy, who has been in the real estate business for 20 years, pointed out that in such a scenario people are borrowing more than the value of the real estate, which spells danger.

“So in essence what you are doing is a combo loan, part secured and the other part unsecured, so when you see something like that dangling in front of you it is a sign of danger,” Levy warned.

She cautioned about these loans, observing that some people have been grabbing at them and buying real estate for investment in Airbnb properties.

She issued a stern warning for mortgage institutions to be responsible in their lending practices and policies to prevent the risk of a real estate bubble arising, given the fact that there is an oversupply of apartments in the country with upwards of 1,000 units being unsold in and around Kingston.

For his part, executive director and head of corporate advisory at Sygnus, Greg Samuels explained that given his company’s diversified real estate portfolio, such risk of overexposure is significantly minimised. Sygnus offers financing for real estate projects as well as short-term equity holdings in real estate developments, among other financial and business services.

“We at Sygnus structure our portfolio to minimise such risk, where we are not going to be overexposed to residential development if something should happen,” Samuels shared. He declared, “Sygnus has built in the necessary safeguards to protect us in the event of a bust.”

One of these safeguards is that all of Sygnus’s projects are carried out through a partnership or co-investment with pension funds, with interest in holding real estate for sale or rental and getting out in approximately three years.

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