<< Matrix continued from Page 31
Continued on Page 34 >>
pages, searched for forms and then faxed them between each other
in an effort to get the lending package together. This added weeks to
the process, lengthening the closing time between a “hello” letter and
a fully executed loan agreement.
Documents such as tax returns, proof of funds and personal-account
activity are now at a mortgage broker’s fingertips and can be generated
at a moment’s notice. Rent rolls, operating statements, budgets and
other financial information are input into reporting software that is
typically kept in a digital format.
These reports can be created at the touch of a button and sent to a
lender in less than 24 hours. If the information needs to be in a different format, no problem — it’s that simple in today’s world.
These days, it’s not uncommon to see, for example, a loan request
originate on the East Coast in which a lender requested documents
on a Monday and the term sheet was in front of the borrower on a
Thursday. The broker that originated the loan could have been in Texas
and never had a face-to-face meeting with the borrower — if it was
all done digitally.
Document collecting, sizing the loan and a review by a credit
committee can happen fast because there are no delays in the loan
process. Everyone can collaborate electronically and, although
there could be a possible site visit and appraisal, the rest could be
handled within a digital document-handling environment.
Not only has the lending process become streamlined, but third-party reporting has changed because of technology. Inspectors
now commonly use online platforms, and site inspectors in the
field have thrown away pens, paper and even digital cameras, replacing
them with tablets or computers.
Inspectors gather all their information on a mobile device through
a custom app, and that information can be seen and archived
through a web-based portal, giving lenders and mortgage brokers
real-time information without ever leaving their desks. The process
of inspecting a roof, which required insurance for the inspectors and
permission from the property owner, changed with the introduction
of drone technology. Now, an investor can hire a third-party roof inspector and, through the use of a drone, receive digital-video footage
of a roof without setting foot on a ladder or having to fly to a city
hundreds of miles away. Everything is reported electronically and can
be accessed from the comfort of your office.
The application of this technology has made the costs of appraisals and
inspections decrease over the years and, combined with the electronic
transfer of data via the internet, the lenders requesting this information
have it in record time. This is another reason why lending packages can be
processed and loans can be closed in half the time they were in the past.
The internet itself has made the process easier for lenders and brokers, simply because you can search a borrower’s name or company
online to find out if there are any issues that might cause problems in
closing the loan. These problems may include fraud, past or pending
lawsuits, or tenants departing the property. These issues may not be
disclosed initially by a prospective borrower, but a quick check on the
internet will bring a lot to the surface. So, just as quickly as a lender can
approve a loan, they also can reject it, saving them time and money.
The internet creates a layer of transparency that wasn’t available in
the past. Within the past 10 years, search engines have improved and
news agencies have become more consistent in their online reporting. Finding out that a retailer is declaring bankruptcy while you, the
broker, are reviewing a rent roll that states their lease is good for 10
more years, is an important part of the puzzle.
Lenders and commercial mortgage brokers also can use online platforms to track market outlooks, comparable properties and property
histories, giving them a better look at the deal itself. This helps
expedite the lending process, because lenders can feel comfortable
with a market they know little or nothing about without leaving the
comfort of their office.