A Better Way to Manage CRE Construction Loan Risk

Learn the key issues to assess when determining the level of construction risk for an individual project

Overview:
 Construction loans for commercial real estate (CRE) remain a major part of commercial bank lending. This webinar provides an overview of the key issues involved in analyzing and assessing the risk of a project. You’ll learn how to configure a loan administration approach for each project based on the unique risk factors involved rather than a one-size-fits-all solution.

Presenters: Hear from Richard Hamm with Advantage Consulting, who has been training bankers on commercial lending for over 25 years, and Will Mitchell, CEO of Rabbet, a construction finance solution used across billions of dollars in commercial lending.

Target Audience: Commercial lenders, credit analysts and support staff that deal directly with commercial construction loans; mortgage bankers, private bankers, small business lenders, loan review specialists, special assets officers, lending managers and credit officers indirectly involved in the construction lending process

Lenders know that construction risk has three basic elements: getting the project completed (1) on time, (2) within budget, and (3) according to plans and specifications. But these risk elements are not equal in every project. If they are not equal, why use a “one size fits all” or standard approach to every project? Granted, there is a need in many areas of lending for a standard approach, but the heart of risk management involves applying risk controls where risk is present. Most standard approaches are a compromise. They “over-control” less risky situations, while they “under-control” the riskier situations.

The better way: For many years, Richard Hamm with Advantage Consulting has advocated a differentiated approach to construction loan administration based on the level of risk. This fits nicely into Rabbet’s software that provides a rules-based approach that allows for customization of risk controls for each specific project. This webinar will discuss creating a differentiated approach to loan administration and how software solutions can help.