Commercial Real Estate Financing: Who Controls the Third Party Reports?

Well, this weekend marked the official end of the 2008 NFL season with the NFC defeating the AFC in the Pro Bowl in Hawaii.  NOW what am I going to do on Sundays???  I guess I’ll have to discover some helpful points to occupy my time … like tennis, martial arts, biking, skiing … It is going to be Hard until the end of summer, but I’ll believe of Something.  I can usually fund some commercial loans, which is our specialty!  I’ve heard that even Fannie Mae and Freddie Mac are limiting cash out now … to ZERO dollars.  Which make sense, because they are losing funds quicker than the Fed can print it.  We still have some portfolio sources for multifamily.  If you have a scenario, give us a call!

Commercial Financing Tip

Who Controls The Third Party Reports?  In light of recent “events” in the mortgage markets, it comes as no surprise that lenders are changing how they manage third party reports.  Right after the S&ampL meltdown in the late 1980s, FDIC insured lenders had been needed to order appraisals and not accept borrower or broker supplied ones.  Ultimately, most lenders followed suit. 

Now that requirement has been extended to all third party reports, particularly Environmental Phase 1 &amp 2 reports.  New EPA guidelines and rules are making it harder to prevent liability in environmentally “challenged” properties where it can be shown that the lender did not physical exercise proper “due diligence” with regard to its environmental investigation.  Save your cash for third party reports until you have applied for a loan, otherwise you will be ordering your reports twice.