Loan Purchase Due Diligence Transaction Checklist .
STANDARD DOCUMENTLoan Purchase Due Diligence Transaction Checklist (CommercialReal Estate)by Kathleen Tarbox Munoz, Hunton Andrews Kurth LLP, with Practical Law Real EstateStatus: Maintained Jurisdiction: United StatesThis document is published by Practical Law and can be found at: us.practicallaw.tr.com/w-027-6674Request a free trial and demonstration at: us.practicallaw.tr.com/about/freetrialA Standard Document containing a checklist of actions and considerations for entities contemplatingthe purchase of an existing loan or loan portfolio from a real estate lender. This Standard Documentis intended for a purchaser conducting due diligence of a loan file.DRAFTING NOTE: READ THIS BEFORE USING DOCUMENTLoan Purchase and SaleTransactionsLoan purchase and sale transactions tend to bemore prevalent when real estate markets declinebecause lenders want to rid their portfolios of nonperforming loans. Loans can be purchased at parvalue or, in the case of non-performing loans, at asubstantial discount. A loan purchase can be in theform of a single loan or a group of loans together ina portfolio.Because a loan purchaser is stepping into the shoesof the lender, it must evaluate risk and calculatethe likelihood of realizing the projected return on itsinvestment (see Loan Purchaser Due Diligence).Loan Purchase and SaleAgreementsOnce the parties agree on a purchase price for the loanor group of loans, they sign a loan purchase and saleagreement. Usually in a loan purchase, the parties donot sign a letter of intent.The loan purchase and sale agreement resemblesa typical real estate purchase and sale agreement.However, certain topics are handled differently.Earnest Money DepositFor institutional buyers, loan purchase and saleagreements do not typically require an earnest money orgood faith deposit. For non-institutional buyers, whetherearnest money is required is determined on a case-bycase basis. For a discussion on earnest money depositsgenerally, see Standard Document, Purchase and SaleAgreement (Commercial Real Estate) (Pro-PurchaserLong Form): Drafting Note: Earnest Money Deposit.ConfidentialityGiven the sensitive information the purchaser isbeing permitted to review relative to the loan andthe borrower, all loan purchase and sale agreementsinclude confidentiality provisions which surviveany termination of the agreement. Absent a loanpurchase and sale agreement, the parties willsign a stand-alone confidentiality agreement (seeStandard Documents, Real Estate ConfidentialityAgreement (Pro-Disclosing Party) and Real EstateConfidentiality Agreement (Pro-Recipient)).Limited Seller Representations,Warranties, and CovenantsThe loan purchase and sale agreement typically hasfew seller representations, warranties, and covenants. 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)Because covenants, representations, and warrantiesare limited, it is critical for the loan purchaser toconduct detailed due diligence.A seller usually only covenants to: Make available a copy of the loan file. If the loan closes, deliver:Purchaser’s Due Diligence Rights–– the assignment documents; andFurthermore, sellers usually limit their representationsand warranties to statements that the seller:After the loan purchase agreement is signed, theseller delivers (sometimes electronically) a copy of itsentire loan file to the purchaser. The purchaser shouldensure that, in addition to traditional due diligenceitems such as title, survey, and property conditionreports, including its environmental condition, the fileincludes items such as: Owns the loan and holds the note. Loan payment history. Has not previously transferred or encumbered itssecurity interests. Information provided by the borrower or compiledby the seller about the property’s:–– the original loan file.A purchaser might successfully negotiate a covenantfrom the seller to reasonably cooperate with thepurchaser post-closing.A purchaser with negotiating leverage may persuade aseller to expand these representations and warrantiesto include one or more of the following: Confirmation of amounts for the current unpaidbalance, accrued interest, and escrow or reserveaccounts. A blanket statement about whether a default orevent of default currently exists or is threatened. Confirmation on whether the seller has receivednotice from:–– the borrower alleging default; or–– the property tenants alleging a borrowerdefault. Affirmation of completeness of the loan file. A statement that:–– no mortgaged property has been released fromthe lien of the mortgage; and–– neither borrower nor guarantor has been releasedfrom any of their respective obligations. Affirmation that no title claims, condemnation,or casualty event has occurred regarding theproperty. That the origination, servicing, and collectionpractices used by the seller are in all respects legal,prudent, and customary.2 Practical Law–– income;–– operations;–– maintenance;–– casualty history; and–– management.Purchaser has a period (typically 30 days) to decidewhether it wants to proceed with the loan purchase. Itconducts due diligence to evaluate any risks involvedin purchasing the loan. The purchaser generally canterminate the purchase and sale agreement for anyreason during the due diligence period.ClosingIf the purchaser decides to proceed, closing usuallyoccurs immediately after the expiration of the duediligence period on a date certain. After due diligenceexpires, there are typically no further conditions toclosing (as there might be in a real property purchaseand sale transaction) and generally time is of theessence regarding the purchaser’s obligation to close.Loan Purchaser Due DiligenceDue diligence helps the loan purchaser to identify andevaluate risk. The extent of due diligence depends onseveral factors, such as: 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate) The length of the due diligence period. The amount the purchaser is willing to spend ondue diligence. The quality of the material provided by the seller. The age of the loan. The older the loan, the morelikely that the loan file information is out of date.Areas of Due Diligence InvestigationCounsel for the purchaser normally ask to review: The underlying loan documents (see Drafting Note,Loan Document Review). Information on any subordinate debt (see DraftingNote, Subordinate Loans, Mezzanine Loans, andIntercreditor Documents). Real estate-related reports, such as any:–– new information on the borrower and theguarantor.(See Drafting Note, Additional Due Diligence.)The role of the purchaser’s counsel is to give thepurchaser feedback on the materials reviewed.An important part of that review is identifyingwhat may be missing from the files. It is commonfor the servicing files to be incomplete. The duediligence period is usually the purchaser’s onlyopportunity to track down missing informationand documentation.The purchaser’s counsel should have a well-organizedand a straightforward method of communicatingresults of due diligence to its client. This StandardDocument provides a comprehensive checklist ofdocuments to review and issues to look for whenreviewing a loan file as purchaser’s counsel.–– inspection reports; andState and Local Laws–– environmental reports.(See Drafting Note, Third Party Property Reports.) Property operations information, such as:–– Insurance policies and whether coverage isadequate;–– rent rolls;–– operating statements;Assumptions–– tax notices;This Standard Document assumes:–– lease agreements, estoppels, and tenantsubordination agreements; and The purchaser is buying one or more permanent,fully funded loans.–– ground lease documentation, if any. The parties have signed a loan purchase and saleagreement.(See Drafting Note, Property Contracts andAgreements.) The loan purchaser is unrelated to the loan seller. Title policy, survey, and zoning information (seeDrafting Note, Title Policy Review). The transaction parties may be institutional orprivate equity lenders. Borrower entity information from closing (seeDrafting Note, Borrower Party Information). The transaction is as is. The legal opinion issued at loan closing (seeDrafting Note, Legal Opinion). Additional new information gathered including:–– an updated title report;–– updated property information;3 Practical LawThis Standard Document should be modified to reflectany supplemental items that may need to be reviewedbased on applicable governing law. Consult with localcounsel to determine whether local laws or customsrequire additional document review. The loan seller gives no representations andwarranties about:–– the condition of any loan collateral;–– the completeness of the loan file; or–– the enforceability or priority of the lien of thelender’s security interests. 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate) The loan seller may or may not agree to give limitedrepresentations and warranties about the seller’s:–– authority to enter the transaction; and–– ownership of the loan. The loan purchase and sale agreement establishesa short due diligence period for loan file inspectionand all other purchaser due diligence. The closing date is time is of the essence on thepurchaser’s part. The loan purchase and sale agreement isterminable by the purchaser for any reason. The purchasing entity is prohibited from being aborrower-related entity. The loan is not securitized or, if securitized, thespecial servicer has approved the sale.Bracketed ItemsBracketed items in ALL CAPS should be completedwith the facts of the transaction. Bracketed itemsin sentence case are either optional provisions oralternative language choices to be selected, added, ordeleted at the drafting party’s discretion.Loan Purchase Due Diligence Checklist[Pool ID: [POOL ID NUMBER]]Loan Number: [LOAN NUMBER]Borrower: [BORROWER NAME]Property Type/State: [PROPERTY TYPE]/[STATE WHERE PROPERTY IS LOCATED]Reviewer Name: [REVIEWER NAME]A. Loan DocumentsDRAFTING NOTE: LOAN DOCUMENTSDue diligence begins with a review of the underlying loandocuments to understand the loan’s principal terms. Thefirst steps of loan document due diligence are to:loan document deficiencies, serious errors oromissions may cause the purchaser to terminatethe transaction. Confirm the loan files contain all documents,instruments, and reports delivered at loan closing.The purpose of this section of the checklist is toidentify and briefly summarize the key terms of theloan documents. All of the documents listed belowmay not exist for every loan, but every file mustinclude a promissory note and a mortgage or deedof trust. If time permits and lender will pay for it, thepurchaser’s counsel may prepare a more detailedabstract of the loan documents, with legal analysisand recommendations. For a sample form of loanabstract, see Standard Document, Commercial RealEstate Loan Abstract (NY). Review and summarize the terms of the loandocuments. Identify any missing documents, pages, signatures,exhibits, or attachments. Identify any errors, omissions, or ambiguities in theterms and provisions of the loan documents.Because loan purchase and sale agreements donot typically require the seller to remediate any4 Practical Law 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)DocumentPromissory Note(s)Status (Indicate any missing pages, signatures,blanks, e xhibits, and other irregularities)SummaryDate:Amount: Lender:Borrower:Maturity date:Applicable interest rate:Debt service payment date:Prepayment permitted: Y/NPrepayment terms (if applicable):Defeasance permitted: Y/NLate payment fees:Default interest:Allonge(s) to NoteDate:Assignor:Assignee:Mortgage/Deedof TrustDate:Loan amount stated: Y/NIf yes, does it match the Promissory Note: Y/NLender name match Promissory Note: Y/NBorrower name match Promissory Note: Y/NRecording information:Legal description match title policy: Y/NAssignment andAssumption ofMortgage/Deedof TrustDate:Recording information:Assignor:Assignee:Assignment ofLeases and RentsDate:Recording information:Assignor name match Borrower in Promissory Note: Y/NAssignee name match Lender in Promissory Note: Y/N5 Practical Law 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)DocumentLoan Agreementand allamendmentsStatus (Indicate any missing pages, signatures,blanks, e xhibits, and other irregularities)SummaryDate:Amount: Lender name match Promissory Note: Y/NBorrower name match Promissory Note: Y/NReserve requirements: (Summarize type, duration, andamount of required reserves)Financial and reporting requirements: (Summarize)Standard borrower covenants: Y/NBriefly describe any special covenants/provisions:Lender consent required for all transfers other than standardpermitted transfers: Y/NBorrower required to cooperate with Lender’s request fordocuments and information: Y/NBriefly describe any limits (time, expense, frequency)applicable to Borrower cooperation:Lender representations, warranties, or indemnities toBorrower: Y/NLender required to respond to consent requests to avoidconsent being deemed given: Y/NLender unconditionally entitled to transfer the loan withoutthe consent of any party: Y/NCash ManagementAgreementDate:Lender name match Promissory Note: Y/NBorrower name match Promissory Note: Y/NType of lockbox: Hard/Soft/SpringingDeposit AccountAgreementDate:Lender name match Promissory Note: Y/NBorrower name match Promissory Note: Y/NDepository bank:6 Practical Law 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)DocumentGuarantyStatus (Indicate any missing pages, signatures,blanks, e xhibits, and other y name match Lender in Promissory Note: Y/NRecourse liability: Full/Limited/Nonrecourse with carveoutsFinancial (net worth and liquidity) and reportingrequirements, if any:Describe any burndown provisions or surviving mnitor(s):Indemnitee name match Lender in Promissory Note: Y/NCap on environmental liability? Y/NIf yes, amount: Any limitations on survival of liability? Y/NIf yes, describe:Other LoanDocumentsUCC-1 FinancingStatementStateFiling date:Document number:Where filed:Secured Party name match Lender in Promissory Note: Y/NDebtor name match Borrower in Promissory Note: Y/NOlder than 5 years: Y/NContinuance filed: Y/NCollateral description: Full/GenericCountyCounty of recordation:Recording information:Secured Party name match Lender in Promissory Note: Y/N7 Practical Law 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)DocumentStatus (Indicate any missing pages, signatures,blanks, e xhibits, and other irregularities)SummaryDebtor name match Borrower in Promissory Note: Y/NOlder than 5 years: Y/NContinuance filed: Y/NCollateral description: Full/GenericUCC-3 FinancingStatement(Continuation)Date:Secured Party name match Lender in Promissory Note: Y/NDebtor name match Borrower in Promissory Note: Y/NDRAFTING NOTE: LOAN DOCUMENT REVIEWPromissory NoteChain of TitleThe promissory note evidences the loan. It is thedocument by which the borrower unconditionallypromises to repay all sums borrowed on specifiedterms.The lender’s name in the promissory note must beidentical to the seller under the loan purchase andsale agreement. If not, look for transfer documentsand establish a chain of title. Confirm borrower’sname is the same in all loan documents and that allsignature blocks are accurate.Delivery of the OriginalPromissory NoteThe purchaser should require the seller to confirm itis in possession of the original promissory note. Theloan purchase and sale agreement should require thelender to deliver the original promissory note to thepurchaser on completion of the loan purchase. It istypical to require an in-person delivery of the originalnote immediately after closing, with the loan file tofollow via insured delivery service. It is importantfor the purchaser to take possession of the originalpromissory note, not a copy. Many jurisdictions havedisallowed lenders to exercise their right to foreclosebecause the lender could not produce an originalpromissory note or prove that they were the rightfulnote holder.8 Practical LawIn all cases, entity names should be precisely statedincluding punctuation and abbreviations. Entity namesshould be confirmed by a current (within 30 days) stateissued certificate of good standing or the equivalentfrom the jurisdiction in which the entity is formedor doing business (see Drafting Note, Borrower andGuarantor Due Diligence).Allonge to Promissory NoteAn allonge is an instrument that endorses apromissory note from one note holder to the next.The existence of one or more allonges indicates theloan has been previously transferred and that the loanseller is not the original lender. The loan purchasershould confirm the loan’s chain of ownership is 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)unbroken and that the seller is the rightful owner andholder of the original promissory note. Any allongebeing received by the purchaser should also be anoriginal signature, not a copy.Mortgage or Deed of TrustThese instruments create the lender’s lien andsecurity interest in the real estate which is thecollateral securing the payment and performance ofthe borrower’s loan obligations. Without a mortgageor deed of trust, the loan is unsecured, and thepurchaser would have no right to the real estatecollateral.The purchaser must confirm that both the legaldescription attached to the mortgage and therecording information for the mortgage exactlymatch the seller’s title policy (see Drafting Note, TitlePolicy Review). The purchaser should also confirmthat any assignments of the mortgage (as reflectedthrough any allonges in the file) have been properlyrecorded.Loan AgreementThe loan agreement contains most of theinformation on covenants, representations, andwarranties and the rights of the parties. If there isnot a loan agreement, then look for the loan’s keybusiness terms in the provisions in the mortgageor deed of trust.The information culled from the loan agreementand included in this checklist is a snapshot. Issuesof permitted transfers, borrower cooperation,lender indemnities, and other important provisionsare sometimes abstracted in more detail by thepurchaser’s counsel (see Standard Document,Commercial Real Estate Loan Abstract (NY)).Cash Management AgreementNot every loan has a cash management system inplace, but if one exists, the purchaser must arrangeto transfer control of the cash after closing. This9 Practical Lawtransition requires cooperation from the sellerand third parties. Since not much cooperationis routinely required of the seller, this issuemust be anticipated and addressed in the loanpurchase and sale agreement. Cash managementagreements typically have a separate noticerequirement to the cash management bank tocomply with when the loan is transferred. For moreinformation on cash management agreements, seePractice Note, Cash Management for CommercialReal Estate Loans.Deposit Account ControlAgreementA deposit account control agreement is expectedwhere: A hard cash management system is in place. There is a separate signed agreement with adepository bank.It is important for the purchaser to know who isholding these funds and how the funds are to bedisbursed. The deposit account agreement typicallyhas a separate notice requirement to the depositorybank to comply with when the loan is transferred. Formore information, see Standard Document, DepositAccount Control Agreement.GuarantyThe purchaser must understand the recourseliability assumed by the loan guarantor. Knowingwhether the guaranty is full recourse, limitedrecourse, or nonrecourse with carveouts iscritical for a purchaser as it assesses if the loanis adequately secured.Most commercial real estate borrowers and lendersstructure their financing arrangements as nonrecourseloans. This means, in essence, that if the borrowerdefaults, the lender can exercise remedies againstthe collateral, but it cannot pursue the borrower, itsconstituent members and managers, or its guarantorsand indemnitors personally. 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)Nonrecourse carveout guaranties allow the lenderto have recourse beyond the collateral for certainnegotiated matters that are expressly carved outfrom nonrecourse treatment. These are typicallybad acts on the part of the borrower. For a nonperforming loan, the purchaser wants to determinewhether recourse has been triggered based on theborrower’s conduct.The purchaser should also confirm whether there areany other limitations on the guaranty, such as: A monetary cap on the guarantor’s liability. A time-based limitation after which the guarantor’sliability changes or terminates.For more information on non-recourse carveoutguaranties, see Standard Clauses, NonrecourseCarveout Provisions in Commercial Real Estate(Mortgage Loans) (Pro-Lender) and StandardDocument, Guaranty of Nonrecourse CarveoutObligations (Pro-Lender).Environmental IndemnityAn environmental indemnity agreement is given bythe borrower and by one or more creditworthy personsor entities, each typically an equity owner with theability to control or manage the borrowing entity. Thepurpose of an environmental indemnity agreementis to limit a lender’s exposure for environmental risksassociated with real property ownership.If there is a cap or limit on liability under theenvironmental indemnity agreement, ideally thepurchaser wants updated environmental information.However, this is not always feasible given the timingfor due diligence. If new environmental studies arenot possible, the purchaser should at a minimumconduct a thorough public record search to see ifthere is anything of record demonstrating adverseenvironmental conditions.If there is a known environmental problem with theproperty, this issue is best addressed in the loanpurchase and sale agreement. The seller will notgive an indemnity but might represent and warrantthat no environmental issues have arisen since theloan was originated. For a more detailed discussionof potential environmental liabilities, see Practice10 Practical LawNote, Commercial Real Estate Loans: Lender’sEnvironmental Liability.Sunset ClausesIndemnitors are often reluctant to carry the survivingliabilities of an environmental indemnity agreement ontheir books indefinitely. Therefore, some environmentalindemnity agreements contain a sunset clause. Asunset clause provides that the indemnitors’ obligationsterminate on a date certain, usually one to five yearsfollowing the repayment of the loan or lender’sforeclosure on the real property, subject to certainexceptions. For more information on sunset clauses,see Standard Document, Environmental IndemnityAgreement (Pro-Lender): Drafting Note: Survival.Other Loan DocumentsThere are some documents that a reviewer may findin a loan file that are not included in this list becausethey are not a part of what is standard in most loans.These documents might include: Security agreement or pledge of interests in theborrower entity. Loan modification agreement. Bond agreements. Interest rate cap agreement. Contribution agreement(s) (if multiple borrowers).These types of documents should not be overlooked asthey too provide important information about the loan.UCC-1Security interests in most types of personal propertycan be perfected by filing a properly completed UCC-1financing statement (UCC-1) in the appropriate filingoffice (see Practice Note, UCC Creation, Perfection,and Priority of Security Interests). The purchaser wantsto ensure that the lender has properly perfected itsliens and that the personal property is part of thecollateral securing the loan being purchased. If theinterests in the borrower will serve as collateral for thelender, the purchaser should confirm a separate UCC-1securing the pledge of those interests has been filed. 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)B. Subordinate Loans, Mezzanine Loans, and Intercreditor Documents:Intercreditor AgreementDate:Senior Lender:Junior Lender:Co-Lender/ ParticipationAgreementDate:Lender A:Lender B:Subordination AgreementDate:Subordinating party:Party receiving subordination:Subordinate Loan DocumentsMezzanine Loan DocumentsDRAFTING NOTE: SUBORDINATE LOANS, MEZZANINE LOANS, ANDINTERCREDITOR DOCUMENTSThe purchaser must understand what, if any, additionaldebt encumbers the property or the borrower, how thatdebt is structured, and if enforcement of the debt issubject to any agreements among multiple lenders.Subordinate LoansA subordinate mortgage can pose several risks to thefirst mortgage lender, such as: Increased bankruptcy risk. After an event ofdefault under the second mortgage loan, thesecond mortgage lender may be more likely tofile an involuntary bankruptcy action against theproperty owner. Problems in bankruptcy. If the mortgage borroweris embroiled in a voluntary or involuntary bankruptcyproceeding, the rights of the second mortgagelender can impede, delay, or adversely affect theenforcement actions of the first mortgage lender. Ina borrower bankruptcy, the second mortgage lender:–– is a secured creditor of the mortgage borrower,depriving the first mortgage lender of the11 Practical Lawprivileged position of being the sole member ofits class;–– may assert, under various legal theories, that allor a portion of the second mortgage lien shouldtake lien priority over the first mortgage loan; and–– may challenge the first mortgage lender’s rightsto rents and other income generated by theproperty (see Practice Note, Postpetition Interest,Fees, Costs, and Charges in Bankruptcy). Drain on Funds Available. A lender depends onproperty-generated income to satisfy the loan’s debtservice obligations. If there is also a subordinate loan,the property must generate enough income to paydebt service for both loans. This can pose a significantdownside to the senior lender if the property is notperforming well enough to fund both loans.Although a first mortgage lender has the power toextinguish a second mortgage lien on foreclosure,until that time the purchaser will inherit the loansubject to whatever subordinated debt is in place, itmust understand what this is and how it will impactthe loan. 2020 Thomson Reuters. All rights reserved. Use of Practical Law websites and services is subject to the Terms of c/agreement/westlaw-additional-terms.pdf) and Privacy Policy (a.next.westlaw.com/Privacy).
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate)Mezzanine LoansMezzanine loans are loans made to the propertyowner principal who pledges its ownership interests assecurity for the loan. They are only indirectly securedby the real estate collateral in the mortgage loan.Mezzanine loans are subordinate to mortgage loansmade to the property owner. Because the collateral fora mezzanine loan is ownership interests in a companyas opposed to real property, the creation and perfectionof a security interest in the collateral is governed by theUCC. Mezzanine loans enable financing of a propertyin an amount in excess of the maximum leverage ratiopermitted under a mortgage loan.To u
Loan Purchase Due Diligence Transaction Checklist (Commercial Real Estate) The length of the due diligence period. The amount the purchaser is willing to spend on due diligence. The quality of the material provided by the seller. The age of the loan. The older the loan, the more likely that the loan file information is out of date.
RGF Due Diligence Engagement Template Terms . 1 Introduction The [Applicant] is required to submit to BIS a Due Diligence report prepared by the Due Diligence Service Provider which covers the scope of the Due Diligence work set out in Appendix 7 of the Conditional Grant Offer Letter (the "Due Diligence report"). These termsof engagement set
6. Loan geography 8. 7. Contractual cash flows for each loan or pool of loans Risk System Data: 1. Loan classes and grades 2. Modification history by loan class 3. Loan renewal and funding history by loan class 4. Loan prepayments history by loan class 5. Loan cash flows not collected 6. Loan grade LGD and PD rates 7. Loan grade charge-off history
Section 01 - Legal Due Diligence 04 1.1 Purpose of Legal Due Diligence 05 1.2 Conclusion 1 4 Section 02 - Finance Due Diligence 1 5 2.1 Purpose of Finance Due Diligence 1 6 2.2 Conclusion 2 8 Annexure 2 9 Annexure 01 - Statement of Comprehensive Income 30 Annexure 02 - Statement of Financial Position 31
Phase 1 is concerned with the basics of due diligence with a focus on tools and techniques of due diligence analysis. Day One: The basics of due diligence in the oil and gas business The changing dynamics of the global oil and gas business The strategic relevance of due diligence in market analysis
finalizes the due diligence report - The due diligence report must seek to prov ide the most pertinent information at a gi i i i i h il b bd f ibliven point in time in the most easily absorbed form possible - It is particularly critical to relate the due diligence report to the strategic objectives of the due diligence process.
§ 1.03[1] DUE DILIGENCE 1-8 § 1.03 Benefits of the Due Diligence Investigation If not carefully conceived and managed, due diligence investiga-tions can become expensive boondoggles that never end and never lead anywhere. It should be kept in mind that process without results is useless. The due diligence investigation is all about producing .
5. Anti-bribery due diligence starts sufficiently early in the due diligence process to allow adequate due diligence to be carried out and for the findings to influence the outcome of the negotiations or stimulate further review if necessary. 6. The partners or board provide commitment and oversight to the due diligence reviews.
Introduction to Academic Writing This study pack is designed to take about 50 minutes. It will give you an introduction to academic writing, sharing the most important principles that will guide you through writing during your degree at UCL. It was put together by the Writing Lab, which is the section of the Academic Communication Centre(ACC) that serves students from Bartlett; Psychology .
