The GSB Online Seminar Series

Presenter: Richard Hamm, Advantage Consulting & Training This 90-minute program will be presented live on: February 15, 10:30 a.m.-12:00 p.m. Central Time Recording available through: May 15, 2022 Price: $330 An important part of the commercial real estate (CRE) lending process is the review and interpretation of the property appraisal. This program briefly reviews some issues of the entire appraisal process, such as selecting  and engaging a qualified appraiser, but focuses primarily on the current rules and guidelines that apply to the review process. For instance, did you know that in multiple sets of guidelines and FAQs that our regulators encourage us to have multiple levels or review intensity? By the way, having multiple levels in place helps build personnel back-up and a clear path to train those that are new to the process.ing the report for integration into the overall credit analysis. Fundamental principles and features of appraisals are covered, the December 2010 Interagency Guidelines (regulators may cite Reg. H, Reg. Y, SR 10-16 and others, but all of them ultimately refer back to the 2010 Interagency Guidelines), as well as the primary analytical techniques such as net operating income (NOI) and direct capitalization for income-producing properties. Specific subjects that will be covered during the seminar: Why you should want to review appraisals (beyond just satisfying regulatory requirements) Types or levels of reviews: Administrative/compliance, technical, and third party Practical suggestions for setting loan-size limits to trigger the levels of review Administrative/compliance reviews: FIRREA and other regulatory issues and a sample review checklist Technical reviews: Appraiser independence and competence, types of reports by format and the scope of work, plus a sample review checklist Third party review by appraisers: How appraisers are regulated via USPAP, using USPAP Standard 3 to get a third party review done and example comments from reviews – comments that will help you improve your reviews Review outcomes, and ideas on when and how to request revisions or corrections to the report Issues with screening for USPAP compliance as of January 1, 2020 Target Audience: CRE lenders, commercial lenders, mortgage bankers, private bankers, small business lenders, credit analysts, loan review specialists, special assets officers, lending managers and credit officers Read More

Presenter: Richard Hamm, Advantage Consulting & Training This 90-minute program will be presented live on: March 8, 10:30 a.m.-12:00 p.m. Central Time Recording available through: June 8, 2022 Price: $330 An important part of the commercial real estate (CRE) lending process is to establish the value of the collateral, and in many cases, the value does not need to come from a new appraisal. This program reviews  these options that have been in place since the initial set of interagency appraisal guidelines in 1994. These options typically involve work internally by bankers. At the other end of the spectrum, some projects are very risky or the dollar amount warrants a review of the valuation by third-party appraiser. How does that work and what can bankers learn from the review appraiser’s approach? Specific subjects that will be covered during the seminar: General situations where an appraisal is not required (exemptions) Options for determining value when the loan is exempt from requiring a new appraisal Situations where portfolio or market conditions might warrant a new appraisal, even in an exempt situation Regulatory requirements for internal evaluations and a sample form Key components in validating an existing appraisal and a sample form Two situations that make a validation a difficult option Types or levels of reviews: Administrative/compliance, technical, and third party Practical suggestions for setting loan-size limits to trigger the levels of review Sample comments from a review by a third-party appraiser, and how these observations often differ from typical banker review points – what can bankers learn from the third-party approach? Practical issues with finding appraisers to do reviews and/or appraisal management companies (AMCs) What is Uniform Standards of Professional Appraisal Practice (USPAP) Standards Rule 3? Review outcomes, and ideas on when and how to request revisions or corrections to the report Target Audience: CRE lenders, commercial lenders, mortgage bankers, private bankers, small business lenders, credit analysts, loan review specialists, special assets officers, lending managers and credit officers Read More

Presenter: Richard Hamm, Advantage Consulting & Training This 90-minute program will be presented live on: February 22, 8:30-10:00 a.m. Central Time Recording available through: May 22, 2022 Price: $330 Can you identify the factors that cause cap rates to increase or decrease? How can you mitigate the risk posed by properties with short leases and underlying loans with long amortizations (re-lease or rollover risk)? Whether directly financing commercial real estate (CRE) or including CRE income stream(s) in your overall credit analysis of a borrower, it is important to understand key analytical concepts in evaluating CRE beyond the cash flow and debt service coverage (DSC) and loan-to-value (LTV) ratios. This program covers how capitalization (“cap”) rates are derived and their role in the income approach to CRE market value. It demonstrates (from a case study) how bankers can estimate property values as part on ongoing monitoring of CRE loans. We also cover the qualitative or non-financial issues that affect CRE performance, including re-lease and rollover risk. Specific subjects that will be covered during the seminar: Understanding cap rates and how they are used to link cash flow to property value Using cap rates along with the cash flow as part of ongoing loan monitoring, including estimated property values, not in lieu of appraisals, but as a key part of the overall CRE process Six non-financial or qualitative risks with CRE lending (re-lease and roll-over risk, for example) Other characteristics of CRE that affect ongoing property value Target Audience: Commercial lenders, credit analysts and small business lenders; consumer lenders, mortgage bankers and private bankers; loan review specialists, special assets officers, lending managers and credit officers Read More

Presenter: Richard Hamm, Advantage Consulting & Training This 90-minute program will be presented live on: February 15, 8:30-10:00 a.m. Central Time Recording available through: May 15, 2022 Price: $330 Banks continue to deal with commercial real estate (CRE) loans as a major portion of their loan portfolios. Also, many borrowers still have large holdings of income-producing or rental real estate. Whether directly financing these assets or including the income stream(s) in your overall credit analysis, it is important to understand key analytical concepts in developing CRE cash flow. This program demonstrates (from a case study) the key variables and concepts for determining real estate cash flow, including transaction-level stress-testing and where to find information from existing sources, such as tax returns, and what additional information may be needed, such as customer rent rolls. Specific subjects that will be covered during the seminar: Net operating income (NOI) components and concepts Understanding key variables within NOI: vacancy, management fees, replacement reserves and capital expenditures Using tax return schedules and customer rent rolls Transaction-level stress-testing of debt service coverage (DSC) and loan-to-value (LTV) Target Audience: Commercial lenders, credit analysts and small business lenders; consumer lenders, mortgage bankers and private bankers; loan review specialists, special assets officers, lending managers and credit officers Read More

Presenter: Richard Hamm, Advantage Consulting & Training This 90-minute program will be presented live on: March 8, 8:30-10:00 a.m. Central Time Recording available through: June 8, 2022 Price: $330 In many instances of commercial real estate (CRE) lending, the risks to a borrower/owner/guarantor from contingent liabilities outweigh the strength of the property your bank is proposing to finance. How can you effectively evaluate the risks of these guarantees? This program provides a framework not only for arraying the various properties, but a strategy for determining the risk of individual properties. Yes, developing property cash flows for tax returns and other data is the first step, but bankers need to go deeper into estimating collateral value and any potential shortfall within the property that becomes a direct liability to your borrower/owner/guarantor. Due to the high incidence of banks requiring owners to guarantee a percentage higher than the person’s ownership percentage, minority interests in CRE create a more complicated analysis, even best case/worst case/most likely scenarios. Finally, issues such as property type, location, length of leases in place and strength of tenants quickly take the analysis beyond tax return or operating statement data. Specific subjects that will be covered during the seminar: Net operating income (NOI) components and concepts Understanding key variables within NOI: vacancy, management fees, replacement reserves and capital expenditures Understanding cap rates and how they are used to link cash flow to property value Using tax returns and customer rent rolls, plus issues with commercial leases Unique characteristics of the major types of real estate Transaction-level stress-testing of debt service coverage (DSC) and loan-to-value (LTV) How to use a sample worksheet to explore the major issues, including stress-testing Issues faced in the global analysis of the various holdings of the borrower/guarantor Taking the global analysis beyond the face values of guarantees (contingent liabilities analysis) Using the cash flow analysis as part of ongoing loan monitoring, including estimated property values, not in lieu of appraisals, but as a key part of the overall CRE process Brief look at residential rentals and related cash flow and property value issues Target Audience: Commercial lenders, credit analysts and small business lenders; consumer lenders, mortgage bankers and private bankers; loan review specialists, special assets officers, lending managers and credit officers Read More

Presenter: Richard Hamm, Advantage Consulting & Training This 90-minute program will be presented live on: March 1, 8:30-10:00 a.m. Central Time Recording available through: June 1, 2022 Price: $330 Which property types have unique analytical ratios? Hotels with RevPAR and ADR come to mind. What is a cotenancy clause in a retail lease, and how can it affect the property owner? This program covers important factors in evaluating commercial real estate (CRE), including the ways many property types are somewhat unique, having different metrics and terminology. How about tenant mix and gross space versus rentable space? In addition to cotenancy clauses, what are some typical covenants that a landlord must adhere to? What are typical covenants placed on the tenant? This program also covers key features and components of commercial lease agreements. Specific subjects that will be covered during the seminar: Unique characteristics of the major types of real estate Differences in terminology, metrics and documentation with certain property types Key features and components of commercial leases Strategies for reviewing leases and as part of underwriting and loan monitoring How your loan documents may prohibit changes and/or renewal of leases without bank consent Target Audience: Commercial lenders, credit analysts and small business lenders; consumer lenders, mortgage bankers and private bankers; loan review specialists, special assets officers, lending managers and credit officers Read More