Commercial e-loans - dream or reality?

Real Estate Weekly, March 15, 2000 by Wilhelm A. Rosenberg

As commercial mortgage brokers, we are always keeping an ongoing dialogue amongst ourselves and our lending sources. The overall consensus of our most recent conversations with a number of commercial mortgage lending institutions (regional as well as national) revealed that the flow of quality deals is dropping, while the competition is literally getting knifelike. Additionally, factors such as razor-thin spreads and par-pricing are making it impossible for lenders to achieve "once-upon-a-time" revenue levels. This is further underscored by the overall and currently very volatile interest rate environment. Add to this predicament the results of bank down-staffing and mergers, combined with the flood of ill-prepared applications submitted by self-proclaimed mortgage experts, and anyone will understand that something needs to be done.

In this increasingly competitive environment, lenders are rushed into a speedy underwriting of loans and an even speedier closing. In order to keep up with the competition without affecting the quality of underwriting, the marketplace is currently facing a very real and growing predicament - less deals are getting underwritten in time, and even fewer deals are getting closed. And let us be perfectly clear about this: It is not because of one or the other deal exhibiting a specific lack of quality. Even deals that had all the merits of getting booked never even made it to loan committees - they just fell in between the cracks.

We suspect that those "lost opportunities" for generating revenues do account for large sums. So why not turning those lost opportunities into money-making ones, and while you're at it generate additional business as well? How? We asked ourselves that question and came up with a pretty simple (but costly) answer. Introducing cutting edge technological advances to the commercial real estate finance market. We felt that the time had come to tailor the contemporary Internet-technology that catered almost exclusively to the residential mortgage arena to fit the commercial mortgage universe.

Through our residential counterparts we knew that online generated business, also labeled as "c-loans", allow for a loan originator to handle about twice as much loan applications versus those traditionally generated off-line. Additionally, and after the original implementation costs are amortized, the cost of originating those loans becomes minimal, plus the lender's processing and underwriting routine is enhanced because both originator and bank are using the same integrated data processing platform.

To make a long story short, the result of our pioneering effort, www.MegaFunding.com, is a one of the first-ever achieved accelerated electronic loan submission and approval processes on commercial mortgages. In addition to providing up-to-the-minute interest rates and daily updated market information, our site is enhanced with an online rate matrix allowing prospective borrowers to obtain a detailed overview of a variety of deal structures. Another proprietary and truly unique feature enables a prospective borrower to submit a real time loan application and to shop it with up to 400 lenders for the best deal and rate structure. And borrowers with no time to spare can instantly pre-qualify for any loan request within one keystroke via our "Quick Quote", before submitting a full application.

Yes, we hear you - and we agree that the utopia of dot.com companies has also sprouted businesses that don't know what they're doing. But our site was created and remains administered by commercial loan experts, featuring a support-mechanism that every similar site is lacking. It is a "virtual commercial mortgage broker", not just a loan origination service - and we're always open!

Under this scenario, real estate owners have the freedom to shop for a commercial mortgage whenever or wherever it's most convenient. In short, we have created an easy-to-navigate and user-friendly environment through which today's lengthy commercial real estate loan approval process has been virtually eliminated. Commercial real estate lending will never be the same again!