What … Now?

The Massachusetts Department of Housing and Community Development (DHCD) is going through a few changes. No, voices aren’t getting deeper, and there is no acne involved. The department merged in 71 employees from the Department of Transitional Assistance, and will now be responsible for the state’s emergency homeless shelters.
 
The merger was signed into reality by Gov. Deval Patrick last fall through Article 87 of the state’s constitution.

This, of course, comes at a time when all eyes are already on the department. The state’s Inspector General, Greg Sullivan, recently fired several shots across the department’s proverbial bow, criticizing its handling of the 40b affordable housing development initiative.

DHCD also handles the administration and distribution of stimulus money that is earmarked for the Neighborhood Stabilization Program, parts one and two. They’ve been tasked with trying to figure out just how to solve Massachusetts’ foreclosure crisis.

So basically they’re a pretty busy bunch down at DHCD. How are they handling the transition? The e-mail and phone systems went down for the better part of a day last week. Desks have been shuffled, wires unplugged, extensions changed.
As one staffer succinctly put it: "It’s been a potpourri of absolute madness."

Good Hands, Good Slaps To The Face

Let it be known: As a money lender, Allstate ain’t to be flexed with.

Most life insurance companies are willing to work out a loan extension with their borrowers when real estate loans come due – Allstate’s real estate lending outfit, however, gives a dead-eyed shrug, hefts its baseball bat and goes for the kneecaps.

All right, all right, the Teller is perhaps making that sound a little harsh. But M. W. Sam Davis, senior managing director for Allstate Investment’s real estate group, made no bones about using the foreclosure process as a scare tactic when he addressed the crowd at the Real Estate Finance Association’s meeting last week.
"We’ll start the foreclosure process if we have to, and that gets people’s attention," he said.

Lots of major loans have been coming due in 2009, and the capital-minded life insurance industry needs that money. Unfortunately, its borrowers usually can’t pay it off (thanks for nothing, economy!), so borrower and lender have to strike a deal. Most insurance companies will agree to an easy loan extension plan to ease the suffering.
But not Allstate. The company went into nut-job protectionist mode early on in the economic collapse (and therefore looks pretty smart, actually). First it will initiate the foreclosure to show the borrowers Allstate means business, then work negotiated paydowns or recourse on the loans once the borrower understands the gravity of the situation. Allstate has only made one foreclosure thus far. But make no mistake: those "good hands" will crush you like a bug if you mess around.

Summer Fun (It’s Summer?)

Things seem to be getting a little plucky down at the commercial real estate brokerage Richard Barry Joyce & Partners. This year’s second quarter market report (which is no harbinger of good news, trust us) apparently tries to keep things a little light in an otherwise ugly market.

Along with the usual charts for absorption (negative 140,000 square feet), vacancy (at 14.5 percent) and Class A rents (declining $.80 to $37.95 per square foot) there is something of a curiosity: a 30-clue crossword puzzle.

Apparently the brokers down at RBJ have had a little time on their hands. But hey, The Teller loves it! It’s a game for people who spend all day looking at press releases and news articles about banking and real estate, so basically it’s directly up our alley.
Readers can check it out at http://www.rbjrealestate.com./ RBJ suggests sitting back "with a glass of your favorite iced tea or lemonade and challenge your knowledge with the RBJ Summer Fun Crossword Puzzle."

It’s up to you what’s in the glass, but hey why not enjoy a little fun. Put your feet up, and delve into the word game. Chances are, you’re not moving any commercial real estate, so you’ve probably got time.