How To Find A Commercial Mortgage Lender Who’s Still Lending

We are in the midst of the most challenging credit environment in a generation. Many lenders have closed their doors forever and virtually all have tightened their lending standards. Even borrowers with clean finances, good credit and healthy down payments are finding it difficult or impossible to get their projects funded. What a difference a year makes.

We’ve been living in an era of cheap money for a-long time now. Interest rates and marginal income tax rates both began to moderate and trend down as America and the Federal Reserve embraced the supply side of the economic equation. But cheap money does not, necessarily beget copious amounts of lending even if willing borrowers abound.

Look at our situation right now; rates are so low that when you factor in inflation money is practically free. There are plenty takers willing to invest in commercial property or undertake a new development project but the banks aren’t funding loans.

It is not the cost of money that matters, it’s the flow. The key to a vibrant credit market is liquidity. Most financial Institutions have no real interest in holding the loans they write.
They could hold on to their commercial mortgages and earn some interest but so what?

They could earn interest by buying Government bonds and Government bonds have no risk. Most financial institutions either sell or borrow against their mortgages so they can get more money to loan out again or to invest in other core business activities.

What has happened recently is that the secondary market for mortgages seized up. No one was willing to buy mortgages so, if banks wrote them they were facing the prospect of holding them and, thus, tying up their capital at substantial risk. They opted not to write them. No loan buyers in the market, no loans. It doesn’t matter how low rates go.

To facilitate the efficient buying and selling of mortgages Wall Street turned them into bonds. They took hundreds of loans at a time, of all different quality, bundled them and called them collateralized mortgage obligations (CMO). These CMOs were bought and sold and repackaged and borrowed against again and again, The CMOs included good mortgages and poor mortgages and even some dreaded “sub-prime” mortgages. Eventually, no one could figure out who owed what to whom and what actual property was backing what bond. Investors stopped buying. In very short order volume in the secondary mortgage market dropped by more than 80%. No loan buyers, no loans.

So what is a borrower to do? At my firm, MasterPlan Capital, I talk to borrowers every day. I can assure you they don’t care about the CMO market or how hard it is to find buyers for mortgage paper now-a-days. They want their deal funded as-soon-as possible credit crunch or no credit crunch.

I’m a commercial real estate investment banker; it’s my job to get my clients the money they need quickly, efficiently and on the best terms available. I had to find funding sources and investors who were un-phased by the credit market’s liquidity problems.

The answer should be obviously to professionals and borrowers alike; find lenders who don’t sell their loans.

A mortgage lender who holds the loans it originates is wholly unaffected by the fact that there are few buyers. He just doesn’t care. There is a name for these unique lending companies, there’re called “portfolio lenders”. They issue mortgage loans and they keep them in their portfolio, collecting interest over the life of the loan and receiving their principle back at maturity. Portfolio lenders have the freedom to be flexible and write loans they want to write rather than writing a loan that will be sure to appeal to a very discriminating debt purchaser. They close deals much faster and with less paperwork and less documentation than lenders dependent on the whims of the market. Portfolio lenders are still in the game while the big national banks, insurance companies and Wall Street sit on the sidelines and wait for the market to become liquid again.

I’ve been able to identify and establish relationships with quite-a-few portfolio lenders in several segments of the financial industry. By turning to this special group of money sources I’ve been able to secure approvals for clients who simply could not get financed through traditional outlets.

I’ve had great success with hedge funds, real estate investment trusts (REITs), and private lenders.

Hedge funds crave risk while others shun it. They pride themselves in being aggressive and having the ability to see the value in a deal when others can’t or won’t. These hedge funds are largely unregulated and can invest wherever they see fit. Best-of-all hedge funds are flush with cash. They have tons of money immediately available and can make decisions and close deals in just days. Once you have identified a fund that has a taste for real estate and a desire to make deals all you have to do is bring them what they want. And once you’ve made them money in a deal you’ll have a funding source for life.

REITs are similar to hedge funds in some respects but they are often publicly traded and thus lack the flexibility inherent in hedge funds. A REIT is a specialty company that must, by law, operate in the real estate sector and distribute substantially all of it’s income to it’s shareholders. Most REITs directly invest their assets in income producing real estate such as apartment buildings, retail centers, hotels or office buildings. But some are in the business of making loans. The trick is to find them and then to come to understand their lending criteria. By and large they are portfolio lenders so if your building or development project falls within their investment parameters you can close loans all day regardless of the credit environment.

Private lenders are individuals or privately owned business entities that seek high yields on their investment capital by lending it out against commercial real estate. Once called “hard money” lenders they are now main-stream and represent the fastest growing segment of real estate finance. There are literally hundreds of firms that hold themselves out as private lenders. The trick is knowing which ones will truly come through with the money on closing day. Working with a legitimate private lender can be extremely rewarding, they identify with property owners and investors and write loans based on the merits of the deal not a set of Government imposed guidelines. A good private lender on your team is like money in the bank. But, beware, a disreputable private lender can ruin your deal and your reputation.

When seeking financing for commercial real estate I suggest you start with a simple but important question. Ask the lender if they sell their loans or portfolio them. If they tell you they hold their loans for their own account in their own portfolio, you’ve found someone who can afford to ignore the credit crises and write you a check no matter what the market happens to be doing.

Company and Business Law – In Constant Evolution

Business and company law comes under the umbrella of commercial law, being the area that dictates and drives ethical and legal business practices in both the private and public sectors of the economy. It bestows the legal framework within which all businesses may be originated and structured, as well as how commercial behaviour is conducted. Commerce and company law covers a wide variety of topics relating to the law of partnerships, limited partnerships, franchises, limited liability companies, corporations and agency.

In today’s current economic climate businesses are finding it harder than ever to streamline operations, experience growth or to expand into other markets. Many issues arise around the legality of such manoeuvres and if one is ‘not well advised’ the next business move could be your last due to myriad of legal ramifications. The body of commercial law is dynamic and constantly evolving. Without the assistance of a specialist company and commerce law firm, it is near impossible to keep up to date with these changes and detailed knowledge on all the facets of commercial law that affect yourself, your business and its strategies.

In New Zealand, The Companies Act 1993 and associated legislation changes it brought, changed the governance documentation and statutory context within which companies operate. A concern for enterprise owners is the new responsibilities and potential liabilities that were legalised after the formation of the act, a trend that is continuing today. Since 1993 government agencies, such as The Ministry of Economic Development have constantly altered the status quo and requirements of businesses through the development of policies and direction in company and commerce law. In a prime example in 2005, the Ministry provided policy advice on the Business Reform Law Bills 2006, which aims to improve industry laws by revising several statutes at once. To date, over 200 changes to over 15 Acts of Parliament have been completed under this reform.

No matter what stage an enterprise is in, whether start-up, development or winding down, there are important legal guidelines that must be adhered to. A reputable law firm will be able to advise on such topics, including general trade / production advice, compliance with both New Zealand and international law, tax requirements, employment law, terms of trade and trademark, copyright and intellectual property. Those firms with much experience in company and commerce law will go further and be able to provide advice on company and corporate strategy, along with optimising enterprise structures.

Role Of Modern Private Investigator

A Private Detective or Private Investigator (PI) is a person who conducts investigations, usually for a private citizen, business, or organization. They also can work for attorneys in civil cases or criminal cases on behalf of a defense attorney or a client. Many Private Investigators work for insurance companies to investigate suspicious insurance claims for that company. Some Private Investigators also are hired to search for evidence of adultery or other illegal conduct within a marriage to establish grounds for divorce or child custody. Within the Private Investigation Industry nation wide adultery or other “socially unexcitable behavior” by spouses and partners is one of the most profitable activities investigators undertake.

Private Detectives also conduct process serves, background checks, skip tracing, and locating of missing persons. Many agencies across the country specialize in one particular field of expertise. For example, some PI agencies deal only in skip tracing, others may specialize in surveillance, and still others may specialize in bug detection which is the locating and disposing of unwanted forms of electronic surveillance often found in corporate espionage or personal eves dropping cases. Some of the other many specialties a PI might have is Fraud Investigations, Personal Security or Bodyguard details, and Computer Forensics to name a few.

Private Detectives and Private Investigators often work irregular hours due to of the needs of there case which require them to conduct surveillance and contact people who may or may not be available during normal working hours. Early morning, evening, weekend, and holiday work is common. Most Private Detectives and Private Investigators spend a majority of there time away from their offices conducting interviews or surveillance, but some work in their office most of the day conducting computer searches and making phone calls. Those who have their own agencies and employ other investigators may work primarily in an office and have normal business hours. Sometimes an investigation calls for the investigator to be armed, such as certain bodyguard assignments for corporate or celebrity clients. Detectives and investigators who carry handguns must be licensed by the appropriate authority in most cases to carry a firearm on duty. In most cases, however, a weapon is not necessary, because the purpose of the work is gathering information and not law enforcement or criminal apprehension.

Most states require that Private Investigators be licensed. Some Private Detectives are former police officers or former military, although many do not have that kind of professional background. Many states have strict laws that govern and regulate the Private Investigation industry in there state. A Private Investigator often works long hours, keeping detailed notes and video for reports to supply to there clients and often spend most of there time in the field conducting surveillance related work. Many Private Detectives have college degrees or have taken legal or criminal investigation related courses to better prepare themselves for there particular field of investigation. Private Detectives and Private Investigators typically have previous experience in other occupations that prepares them for there career as a Private Investigator. Some previously worked for insurance or collections companies, in the private security industry, or as paralegals. Many investigators enter the field after serving in law enforcement, the military, government auditing and investigative positions, or federal intelligence jobs, which makes them an expert in that field of investigation due to there experience.

Former law enforcement officers, military investigators, and government agents, often become Private Detectives or Private Investigators, others from such fields as finance, accounting, commercial credit, investigative reporting, insurance, law, etc. These individuals often can apply their prior work experience in a related investigative specialty and be considered experts in there field.

A background in subjects such as criminal justice and police science can be helpful to anyone interested in Private Detectives and Private Investigators employment. Most corporate investigators require having a bachelor’s degree, preferably in a business-related field. Some corporate investigators have a master’s degree in business administration or a law degree, while still others are CPAs. Corporate investigators hired by large companies may receive formal training from their employers on business practices, management structure, and various finance-related topics. The screening process for potential employees typically includes a background check for a criminal history.

The majority of States require private detectives and Private Investigators to be licensed in there state. Licensing requirements vary, dramatically however. Seven states (Alabama, Alaska, Colorado, Idaho, Mississippi, Missouri, and South Dakota) have no statewide licensing requirements, other states have very few requirements, and many more states have very stringent regulations. A growing number of states are enacting mandatory training programs for private detectives and investigators. For example, the Bureau of Security and Investigative Services of the California Department of Consumer Affairs requires private investigators to be 18 years of age or older, have a combination of education in police science, criminal law, or justice and experience equaling 3 years (6,000 hours) of investigative experience, pass a criminal history background check by the California Department of Justice and the FBI (in most States, convicted felons cannot be issued a license), and receive a qualifying score on a two-hour written examination covering laws and regulations. There are additional requirements for a firearms permit.

Most private-detective agencies are small, with little room for advancement due to not more than one to three Private Investigators in the Firm. Usually, there are no defined ranks or steps, so advancement takes the form of increases in salary and assignment status. Many detectives and investigators work for detective agencies at the beginning of their careers and, after a few years, start their own Agency after receiving the necessary experience. Corporate and legal investigators may rise to supervisor or manager of the security or investigations department.