New York, NY (PRWEB) October 31, 2012
Recently Adam Petriella, Managing Partner of The Real Estate Finance Group, Inc.sponsored a private event where loans and lenders were discussed at length and in detail. Here are some excerpts from that meeting.
Q. Adam, what is the biggest misconception amongst borrower’s today.
A. The most common misperception- and I’m not sure why- is the confusion about how low rates ought to affect underwriting. By that I do not mean loan proceeds. I mean the misconception that because interest rates are low, real estate fundamentals are somehow liberated.
Q. So what is the problem?
A. It’s a matter of expectations over the realities of the market and risk adjusted pricing. The problem is borrower confusion about what can be accomplished and the resultant friction and wasted resources chasing something that isn’t there.
Q. What are the most common ‘choke points’ you are witnessing in originating or processing loans today?
A. In good markets or challenged market conditions, a loan funding can only happen as fast as each of the parties involved can provide and process information. So, if a borrower cannot provide needed documents, the process stalls. On the other hand, if the lender cannot efficiently process the paperwork, the process stalls. As intermediaries, we try to manage each side of the transaction to lubricate these choke points.
Q. What else?
A. Appraisals, these are scrutinized and some lenders are notoriously reviewing and rewriting appraisals resulting in lower valuations and lower proceeds. We have solved this problem with our method of underwriting and support of an appraiser’s work.
Q. As Managing Partner is a successful mortgage brokerage shop, what is your greatest challenge?
A. My biggest challenge is in hiring good, motivated candidates but then again, hiring good people is always hard work, especially on the heels of the real estate reset just experienced. Ironically, my belief is the best time to start is on the heels of a real estate reset.