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While it's fairly uncommon, many of us have experienced loans not funding even after all documents were delivered to escrow. A timeline should "end" or otherwise conclude, but it should never promise a "done deal."
Remember that the most time-consuming parts of the process are the appraisal and insurance requirements.
Federally regulated banks are required to order an "arm's length" property appraisal (independent of the broker or borrower's involvement). This includes completed appraisal reports being assigned to a new lender to save time and money.
Typically, income-property appraisals will take three to five weeks, the longest of any single step in the commercial loan process. Consequently, other life-cycle events, such as environmental due diligence, should be designed to run simultaneous with this process.
Another one of the most-common timing pitfalls surrounds insurance requirements. Lenders have fairly exact insurance requirements, and they're all different.
A good lender will provide detailed property-insurance requirements early in the loan process. Follow them. And make sure your clients' insurance agent understands that if these requirements are not met, the loan will not close.
As professionals, we get paid for performance. The top professionals (i.e., the well-paid ones) achieve that status by executing on or ahead of schedule. They deliver, and they keep their clients out of the surprise business. By managing a loan to an established timeline and by successfully demonstrating your command of the commercial loan life cycle, you'll go further in winning repeat business.
Strive to earn your next loan in the middle of the loan you're currently working.
Nathan LaBudde and Fred Hollister are
loan officers at Imperial Capital Bank. They specialize in purchase, refinance (including cash out) and rehabilitation apartment loans; construction loans; and structured financing for other types of income property. They bring more than 30 years of combined experience to the art of commercial-property financing. Reach LaBudde at nlabudde@ImperialCapitalBank.com or (877) 392-2052, ext. 21215, and Hollister at fhollister@ImperialCapitalBank.com or (800) 860-0965, ext. 24205.
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