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Mortgage Credit Panel Discussion

Mortgage Credit Panel Discussion. 2014 Midwest Lenders Conference Chicago, Illinois * June 16-18, 2014. Moderator: Rick Sherman, Berkadia Panelists: Kelly Allen, Detroit HUD Rebecca Barber, Detroit HUD Marie Sherwood, Detroit HUD Charley Gardner, Oak Grove Capital .

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Mortgage Credit Panel Discussion

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  1. Mortgage Credit Panel Discussion 2014 Midwest Lenders Conference Chicago, Illinois * June 16-18, 2014 Moderator: Rick Sherman, Berkadia Panelists: Kelly Allen, Detroit HUD Rebecca Barber, Detroit HUD Marie Sherwood, Detroit HUD Charley Gardner, Oak Grove Capital

  2. Organization Structure Who is a Principal? Who is a Key Principal? Section 50 recommendation Other Considerations: Non-profit Borrower Non-Principal individual with control of a Principal entity

  3. Levels of Review Principal versus Key Principal Entity versus Individual New Construction/Sub-Rehabilitation versus Refinance/Purchase Large Loan Risk Mitigation Policies

  4. Mortgagor Organizational Chart

  5. Principal Documents REO/Debt Schedule (KP only) Credit Reports Listing of Business Concerns OFAC Sponsors’ Continuing Commitment (NC/SR only) Resumes HUD Forms 2530 92013-Supp Fannie Mae Form 1006 (Request for VOD) Trade/Credit References Financial Statements

  6. Top 10 Mortgage Credit Deficiencies (Chicago Multifamily Hub - 2013)

  7. Top 10 Deficiencies No evidence of funds to meet cash requirements (VODs). Insufficient explanation for “yes” answers on the 92013-Supp. Development team with inadequate industry/HUD experience.

  8. Top 10 Deficiencies, Cont. Inadequate analysis of Sponsor/Principal troubled assets and/or properties maturing in 5 years. No mortgage credit review for Passive Investors. Not providing CPA-reviewed financial statements.

  9. Top 10 Deficiencies, Cont. Cash-out requests with aggressive cap rate, inadequate repairs, and inadequate funding of the replacement reserve. Occupancy and NOI underwritten higher than historical operations. Not identifying correct Section 50 signatory.

  10. #1 Mortgage Credit Deficiency…

  11. Failure to identify correct Principals for Mortgage Credit review.

  12. Questions? Comments? Confusion?

  13. General Contractor Documents Resume (AIA 305) Credit Report Financial Statements Joint Venture Documentation

  14. Management Agent Documents Resume Management Agreement HUD Forms: 9832 – Management Entity Profile 9839 – Management Certification 935.2 – Affirmative Action Plan (NC/SR only) 2530 92013 – supplement

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