|This training is designed to help participants make more informed underwriting decisions when underwriting owner-occupied real estate loans. The session emphasizes the need for sound underwriting of the owner occupant, and further emphasizes aspects of real property finance which must be considered when making an owner-occupied real property loan, including examination of the appraisal from the perspective of the bank lending officer.
The real property underwriting concepts presented in the session include an explanation of net operating income (NOI) calculation, including replacement reserves and management fees, debt service coverage ratio and debt yield minimums, and loan-to-value parameters.
While there is an emphasis on sound real property credit underwriting principles, equal weight is given to structuring and underwriting techniques designed to monitor existing loans secured by real property, particularly owner-occupied real property loans. Further analysis of scenarios where real property has inadvertently become the primary source of repayment will also be examined.