Responsible Commercial Real Estate Lending
Effective Relationship Management
Commercial real estate lending including financing owner occupied real estate, income property and acquisition/development/ construction has been a significant source of loan volume and income for many banks. Unfortunately, this type of lending has also been a source of significant loan losses. This module will discuss responsibly financing the three broad types of commercial real estate property. The module will address information requirements, underwriting and monitoring these types of loans. The module will also focus on assessing environmental risks, appraisals and insurance.
Identifying and Managing Problem Loans
This module focuses on developing and managing profitable customer relationships. The module opens with a discussion of the changing role of the lender. The elements of a value- added relationship are defined with emphasis on how the lender can become a trusted adviser. The module then explores life cycle relationship management and effective customer calling. Profitably pricing relationships is often the hardest part of relationship management. The module outlines nine steps for more profitable relationship pricing. The module concludes with a discussion or negotiating skills to enhance the lender’s ability to negotiate a fair relationship package for the borrower and the bank.
Although problem loans are not always preventable, lenders can minimize losses from them with good underwriting, active monitoring, early problem loan identification and aggressive corrective action. This module both draws on earlier material and presents new information to show how problem loans can be identified and what can be done to curtail losses—from meeting with the borrower to managing a bankruptcy.