The Hard Money Edge: October 26th 2026

The Hard Money Edge: October 26th 2026 · By Chris Anderson, Founder & CEO, Boston Trust Corp

First Position

Ignoring cycles and extrapolating trends is one of the most dangerous things an investor can do.” Howard Marks, Oaktree memo, July 1, 2003.

Flippers are paying more for houses and getting less when they sell. They'll now pay up to 68% of after-repair value, up from 66%. Meanwhile 21% sold "mostly below" ARV, and 91% of those blamed the sale price, not the budget. Last year's comps went into this year's purchase price.

Massachusetts is turning the same way. September listings rose 6.3%, pendings fell 7.9%, and price cuts rose 11.2%. The buyer's 30-year is 7.32%.

Underwrite ARV off the last 90 days of closed sales. If the deal only works at last year's ARV, it doesn't work.

We hold every loan we make on our own balance sheet, first position, Massachusetts only. We don't broker the money. We are the money.

By the Numbers

30-YR FIXED 7.32% (7.40)	10-YR 5.00% (5.09)-live Mon 4:46 AM ET 4.99%	5-YR, TAKE-OUT BASE 4.82% (4.89)
2-YR 4.69% (4.74)	PRIME 7.00% (7.00)	OCT 28 FOMC Hold expected at 3.75-4.00% (hike odds-16% last week)
WTI DIESEL $103.27/$6.276 ($101.41/56.33)	MA SF MEDIAN $670K Sept, MAR ($665K May, Warren)	MA LISTINGS 15,865 MLS PIN, New+Active SF/Condo/MF, Oct 26 4:47 AM ET. Source: MLS PIN (Pinergy search by Boston Trust, Oct 26 2026, 4:47 AM ET; SF+CC+MF, New+Active)

NUMBER OF THE WEEK 65

Foreclosure auctions on the Massachusetts calendar Oct 26-Nov 1, a minimum count. Source: Boston Trust Auction Tracker, Oct 25, 2026.

Cost of Capital

The Fed sits this week. December is the move.

SOFR printed 3.90%, and a Reuters poll sees a hold Oct 28 and a hike in December. Private credit raised a record $129.15B but Q3 lending fell 28%.

UNDERWRITING NOTE The 5-yr at 4.82% plus 275 bp gives a 7.57% take-out (7.64% last week). Size the refi at 7.57% and stress it at 8%.

COST WATCH

September PPI, released Oct 15; October not yet out

CONSTRUCTION INPUTS	STEEL MILL	COPPER WIRE	SOFTWOOD LUMBER	DIESEL	CONSTRUCTION WAGES
+11.2% YoY	+27.6%	+30.8%	+14.2%	$6.276, +73.4%	$39.20/hr, +4.3%

Lumber futures are softening at $518.50. Northeast union settlements are running 5.8%.

$150K GUT-REHAB MATERIALS

Boston Trust illustration; the line-item split is our assumption

LINE	YEAR AGO	YOY	TODAY
Electrical + plumbing (copper)	$22,000	+30.8%/+30.0%	$28,696
Framing lumber	$20,000	+14.2%	$22,840
Structural steel	$5,000	+27.6%	$6,380
Drywall, roofing, concrete	$30,000	+1.4%/+2.7%/+2.3%	$30,648
Priced lines	$77,000	+15.0%	$88,564

Windows, appliances and finishes ($73K) are unpriced; see Data pending.

Flipper survey (Burns + Kiavi Q2 2026, published August): the index fell to 59 from 63. Average renovation spend fell to $69K. In the Northeast, 55% of flippers report longer days on market.

Underwriting Note: Re-price budgets older than 90 days. Carry 15% contingency on electrical, plumbing and structural.

Market By Asset Type

Greater Boston, Q3 2026 · CMBS delinquency is national, Trepp Sept

ASSET	KEY NUMBERS	LENDER TAKE
Office	Vacancy 24.0% (record); lab availability 33.1%; Quincy office sold 78% below its 2013 price; CMBS 12.16%	Lend on last month's sale, not the 2019 appraisal.
Retail	Vacancy 3.5%; CMBS 6.58%	Service storefronts yes; big boxes need a backfill plan.
Industrial	Vacancy 8.2%; small-bay 6.3% vs big-box 12.5%; CMBS 1.14%	Small-bay flex is the best collateral in MA.
Multifamily	Vacancy 5.6%, $3,012/unit, +2.2%; CMBS 8.04%	Watch expenses, not occupancy.
Condos	MA sales-6.4%, median $525K; Greater Boston 4.3 months' supply	Add 60 days of carry on conversions.

Pre-Foreclosure

This week's feed: 134 new auction notices (147 prior) and 57 Land Court petitions (77 prior). Of the notices, 34% are on 2021-or-later mortgages (32% prior), and 14 of 134 come from private plaintiffs (by our count; 18% prior, 26 of 146 notices after one policy exclusion). Worcester leads the notices with 29, then Plymouth 21 and Bristol 20. Statewide filings in July were up 11.85% from a low base.

Foreclosure Desk

Auction Block: This week has 65 foreclosure auctions, with 294 active, 25 postponed and 20 cancelled. There are also 12 condo lien sales active, none this week. An association sale can carry priority over a first mortgage and can wipe it out, so have counsel confirm what survives. These are minimum counts (Harkins isn't included yet), and this is our first run. Top 8 counties below; the full table is in the web version.

COUNTY	THIS WEEK	ACTIVE	POSTP.	CANC.	CONDO LIEN
Middlesex	13	39	2	3	3
Suffolk	9	37	4	4	5
Worcester	8	44	3	3	0
Plymouth	8	25	3	3	1
Hampden	6	29	5	1	0
Bristol	5	34	1	4	1
Norfolk	5	27	1	0	1
Essex	4	34	5	0	0
Statewide	65	294	25	20	12

Source: Boston Trust Auction Tracker compilation of Massachusetts auctioneer listings, as of Oct 25, 2026.

Deposits (134 notices): 93% are $15K or less. The big one is $400K at 36 Essex St, Wenham (Mon 10/26). Brock & Scott handles 39 notices and Korde 26.

Watchlist

DEPOSIT	ADDRESS	SALE	LENDER	MORTGAGE	MONTHS
$400,000	36 Essex St, Wenham	Mon 10/26 11 AM	Origen Wenham LLC	Sep 2016	121
$10,000	5 Butlers Cove Rd, Wareham	Mon 10/26 11 AM	Belvidere Capital LLC	Apr 2024	30
$15,000	92 Winthrop St, Framingham	Tue 10/27 11 AM	Private individual	Feb 2024	32
$25,000	227 Eagle St, Fall River	Fri 11/61 PM	CCG Fund 1 LLC	Jun 2025	17
$20,000	212 Central Ave, Needham	Tue 11/10 11 AM	CL-LM Resi Purchaser	Jun 2025	17

Source: Warren Group / VFP pre-foreclosure feed, process week 202642. Homeowner and borrower names omitted.

The Paper Trail

869 East Fourth St and 119 M St in South Boston have the same LLC borrower and the same originator, CCG Fund 1 (March 2025). Both are now held by Athene and go to auction Tue 10/27, 1:00 PM and noon, with $10,000 down each. Both are also listed on the MLS, at $2,245,000 and $1,235,000. A loan that changes hands that often is a loan nobody was holding. Know who owns your paper.

WHAT IT MEANS FOR INVESTORS AND BORROWERS

• Underwrite ARV off the last 90 days of closings. Last year's comps are this year's purchase price.

• Re-bid every budget and carry a 15% contingency. Materials alone ran +15.0% on our $150K gut-rehab.

• Size the take-out at 7.57% and stress it at 8%. At the auction block, line up your financing first and have counsel confirm what survives a condo lien sale.

BEFORE YOU BID

Read the notice, pull the assignments and walk the building. The balance is due in 30 days. Call us for a same-day term sheet. We fund the bridge in seven days. 617.752.7000

WORTH READING

• CNBC: 10-year yield drops back to 5% on AI worries

• Bisnow: FoxRock buys Quincy office at 78% discount

• Trepp: CMBS delinquency highest since 2020

DATA PENDING · WSJ Prime page · CME FedWatch Oct 28 odds · Warren Group Sept median · Oct Fed SLOOS · lumber futures YoY · PPI for windows, appliances and finishes · HRC/rebar spot · Boston flipper detail (JBREC subscriber) · mixed-use vacancy and cap rates · opening bids · auctioneers for the watchlist

I have funded through four of these cycles. The discipline never changes. — Chris Anderson, Boston Trust Corp

This newsletter is for informational purposes only and is not an offer to lend or a commitment to make any loan. Auction dates and terms change constantly; verify every sale with foreclosing counsel before you bid.