|
|
|
| HOME
PAGE NON-PERFORMING
QUALIFICATIONS CONTACT |
RESG provides
a higher level of on-site property inspection diligence for
Non-Performing Loan Collateral (NPL). This
NPL diligence is also designed to accommodate the Client's underwriting
needs. The Client is encouraged to modify and prioritize the
components of our typical scope of work (SOW) for NPL inspection
diligence to facilitate it's underwriting needs. The reporting format and SOW for our typical Commercial Property Inspection for Non-Performing Loan Collateral is described as follows: RESG's Commercial Property Inspection - Non-Performing Loan Collateral (NPL) is a quantitative risk assessment of the Property’s economics with a specific focus on its occupancy and cash flow. This risk assessment will include a review of the borrower's business plan, most recent net operating income (normalized NOI) and debt service coverage ratio (DSCR). Contact with the owner and/or property manager will be made to coordinate the inspection tour and data. Follow-up requests will be made to obtain the most current operating data and rent rolls, when these borrower submission items are outstanding. The NPL Inspection is an interior/exterior tour of the improvements and common area. All vacant tenant spaces (apartment units, office suites, retail shops, or hospitality rooms) will be inspected and noted on the Rent Roll. Favorable, or unfavorable, property characteristics such as; physical occupancy, absorption rate, rent schedule, janitorial diligence, deferred maintenance, recent leasing activity, recently cured deferred maintenance, and new capital improvements will be reported. The purpose of this NPL Inspection is to enhance the Loan Servicer’s decision making capability with the Property's most current economic data, on-site observations and local sub-market trends. The goal is to clearly communicate the most probable cause(s) for the non-performing loan status. The cause(s) of the non-performing loan status may be directly related to; a general economic decline, over supply in the marketplace, super adequate improvements, outdated design, deferred maintenance, below average property management diligence, lack of financial support from owner, or any combination thereof. The NPL Inspection will also include a walking tour of competing properties in the neighborhood and the inspector's estimate of the Subject's current and potential competitive set in its market. The NPL Report will be prepared on a modified CMSA / MBA Standard Inspection Report format. The Addendum will include; extensive photos of the Subject improvements and neighboring properties, pertinent inspection exhibits, borrower submissions and sub-market data when available. It should be noted that the inspector will limit his role to being "an information messenger" in his communications with the borrower. He will expressly disclaim all negotiating authority and will remain non-committal on the Lender's default remedies. |