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Commercial Department: From the Top: April 2006


From the Top

Word that 2005’s volume of small-balance commercial loans had exceeded that of global coffee sales brought chuckles to the Scotsman Guide offices. After all, we see a lot of coffee here in the Northwest, as the stereotype goes. And with that, we see a lot of overcaffeinated prognostications.

But trends long brewing in the commercial-lending world appear to legitimize small-balance claims. According to research firm Boxwood Means Inc., loans of between $100,000 and $5 million were estimated to generate more than $130 billion for the second-consecutive year. This represents nearly 175,000 transactions spread across a growing lender pool, with none comprising more than 4 percent of the market.

As attorney Katheryne L. Zelenock detailed in our March edition’s Q&A, the evolution of small-balance loans can be attributed to three factors: relaxed lender guidelines, a large pool of potential deals and recruitment of residential brokers into a commercial field once thought too complex.

“While there is some ‘learning curve’ in the transition from residential lending to commercial lending,” she says, “several lenders offer streamlined lending programs for smaller loans, which are customized to make the process more efficient and more accessible.”

Although more brokers enjoying a “cup of coffee” in the commercial arena can mean more business, it also raises the bar for everyone else. It’s time to be a leader.

In this month’s Scotsman Guide, Mike Myatt of Pacific Security Capital details the issues all mortgage professionals should consider when attracting and retaining talented employees. Imperial Capital Bank’s Nathan LaBudde and Fred Hollister also look at the blunders that brokers could face when approaching commercial loans from the wrong angle.

Educating new brokers on lender parameters and product specifications is vital — just as it is for brokers to seek this knowledge and diligently pass it along to their clients.


Geary Britton-Simmons For questions on this article, call (800) 297-6061 or e-mail

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