What happens when commercial mortgage lending underwriting guidelines tighten?
As a lender on some deals, and broker on others, I have been on both sides of the fence when it comes to the ever changing world of underwriting guidelines.
In today's environment, even income producing properties and the borrowers for them come under deeper scrutiny. Appraisals seem to be coming in lower than we think that they will, little blips on one document or another that a year ago would have been a non-event, now become deal altering events. Caution is the watch word for those in the business of committing capital.
What to do?
It is in this time that relationships and the quality of the loan package that you present become key. I was just having a conversation with my head underwriter about a loan that a residential mortgage broker brought us that does not fit into our parameters: low credit and owner occupied. She stated that she hopes the broker does not get upset by the fact that we are going to bring it to a lender that he may already know about. Here is the point:
Our relationship with this bank, and the way that we present the loan, will get it done. The broker that may approach this bank with a deal once every year, does not have that relationship or really know how to present it. Two people can bring the same deal to the same lender and get two different answers.
The bottom line is this: If you believe in a deal and know that the number work, know the correct lender to bring it to, have some type of relationship with them AND present the scenario and loan information right the 1st time, even in this time of tougher underwriting, deals WILL get done.
Mike
Michael Haltman, President
Commercial Capital Alliance/Exeter Commercial LLC
131 Jericho Turnpike, Suite 202
Jericho, New York 11753
516.741.8880 (O)
516.741.6838 (F)
haltman@easycommercial.com
http://www.easycommercial.com/
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