Initial inquiry :
• As the procuring loan broker , you are pivotal in initiating the potential loan transaction . Your primary responsibility is facilitating the
process and ensuring all necessary steps are taken to secure the loan . This includes an inquiry with the prospective borrower to obtain all the material facts . Your expertise and cooperation are highly valued and indispensable in this process .
• The loan agent or broker , as the procuring loan broker , collects data from the prospective borrower . They will discuss the type of property , address value , loans , protective equity , the purpose of the loan , payment plans , and exit strategy .
• Is sufficient protective equity above the lien to satisfy the lender ' s requirements ? Protective equity , which refers to the portion of the property ' s value that exceeds the loan amount , is a crucial factor in the approval process . For example , a 65 % loan and 35 % protective equity . The borrower must have adequate protective equity because it determines the borrower ' s financial stability and ability to cover the loan amount in the event of default .
• The preliminary value determination procedure is critical in the loan transaction . It ' s generally based on online inquiries like RedFin and Zillow or comparables available to substantiate the value .
• All value determinations at the beginning of the process remain subject to obtaining a thirdparty independent appraisal during the processing period .
• If the transaction is a commercial property , the borrower must also pay for a Phase 1 environmental site assessment .
• A few lenders will not require an appraisal , do their internal valuation , and accept a limited phase 1 .
• Early discussion about the appraisal requirement and Phase 1 environmental site assessment , if required , is crucial . This ensures that everything is done with a clear understanding , preventing any surprises for the borrower and ensuring they are fully prepared and informed about the process .
• Will the net proceeds of the new loan pay off the debt that will reduce their outgoing expenses and increase their cash flow ?
• The procuring broker should actively calculate improved cash flow as part of a submission , with the assistance of the real estate agent and the borrower . It is important to discuss whether the new loan improves the borrower ' s financial circumstances or provides an interim period to fix problems and regain economic stability . Early in the conversation , the borrower understands they must pay for an appraisal upfront .
• Organizing the loan application process is crucial . One way to do this is to set up a lead file using the property ' s address and the agent ’ s name for reference . This file serves as a centralized depository for all relevant information , making it easier to track the progress of the loan application .
• Request the borrower to email all the required exhibits for the loan transaction . This will allow you to place them in the designated digital file efficiently , eliminating the need for cumbersome paper files and ensuring a streamlined process .
• Go to Outlook , look up the property , and set up an email to yourself . Include 2 or 3 references , such as Zillow , Redfin , REALTOR ®, etc ., and send the email to yourself to place in your lead file . This will give you an idea of the property ' s condition , an estimate of its value , and a physical description .
• Obtain a property profile from your chosen title company . This will allow you to determine what liens and encumbrances are recorded against the property , providing crucial information for the loan transaction .
• If the borrower is an entity , look them up on Google and the Secretary of State ' s business search . This research shows that their entity is registered to do business in California .
• If the borrower is an individual , look them up on Google and LinkedIn .
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