The RMA Journal articles from June 2004

The RMA Journal archives from June 2004

It's That Time in the Cycle
June 1, 2004... This is probably the worst time in the economic cycle for risk managers, and I find myself beginning to long for the frenzied days of the late 1990s. Back then, when we turned down a loan there were five other opportunities waiting around the...

What Happened to "Deja Vu All over Again"?
June 1, 2004... Experienced bankers know that an early indicator of economic recessions is a slump in real estate prices, quickly followed by a dramatic increase in foreclosures by the banks. They also know that these conditions persist long after a recovery...

Covering All the Bases in Commercial Real Estate: PNC's Secret Weapon Is No Longer a Secret: An Interview with Hugh Frater, Doug Danforth, and Andy Siwulec
June 1, 2004... Good things come in threes--at least in commercial real estate. Last June readers of The RMA Journal met three gentlemen from Wachovia. This year we hear from three at an acknowledged competitor--Pittsburgh-based PNC. PNC Real Estate Finance...

The Sector Specter: Office and Apartments
June 1, 2004... The Office Market March's employment report of 308,000 new jobs is certainly welcome. It is also the first suggestion that the nascent economic expansion may become self-sustaining. At the same time, Reis's first-quarter data on the U.S....

The Sector Specter: Retail and Warehouse
June 1, 2004... The Retail Market Over the past three years, the resilience of consumer demand has underpinned the retail market and, arguably, the national economy as a whole. Retail real estate has performed well in recent years, both in relation to the...

Underwriting and Monitoring Considerations in Lending to Contractors Today
June 1, 2004... Atypical point in evaluating contractors is "Years in business: The more, the better." That goes for the years of experience of our author as well, and a reader of The RMA Journal receives from him a wealth of experience in lending to...

Draw Management: Construction Disbursement Caveats
June 1, 2004... Common pitfalls in draw management and how to avoid them are presented in this article, which covers the importance of proper approvals, inspections, attention to details, review of each project's general contractor, and communication. As we...

A Loan Officer's Guide to Real Estate Investor Contingency Analysis
June 1, 2004... Contingency cash flow can be used to analyze the strength of support provided by a guarantor. Armed with additional insight into the underlying discretionary cash flow, lenders should be able to better assess a guarantor's true support. ...

Without a Net: LTV Ratios Offer Little Regulatory Leverage against Risky Real Estate Lending
June 1, 2004... Amid a myriad of changes in real estate lending, fundamentals of the discipline remain intact. This article sets the historical stage for the risks inherent in current loan-to-value practices. Its author, a lawyer, has had firsthand experience...

Appraisals: Back to the Basics
June 1, 2004... Let's face it: Real estate valuation is confusing. In the spirit of helping the lender avoid a possible upshot of this confusion--a violation of FIRREA regulations--this article addresses three areas of potential confusion: 1) market value; 2)...

The Most Recent Interagency Statement on Appraisals
June 1, 2004... In preparing this article, the authors found a number of differences between small and large institutions that warrant further discussion. But they acknowledged, "There is no way of providing an answer to every possible scenario, as numerous and...

A Federal Rule for Environmental Site Assessment Practices? Why Lenders Should Care
June 1, 2004... A draft of this rule is expected to be proposed in the Federal Register next month. The public then, will have 60 days to comment. Read this article, visit EPA's Web site to get the whole scoop, and then be prepared to respond in July. ...

An Opportunity That Should Not Be Missed
June 1, 2004... How well are commercial bank real estate loans performing? Is your CRE loan portfolio performing better than your CMBS (commercial mortgage-backed securities) loans? Better than those of your peer institutions? If so, exactly how much better?...

Measuring and Managing Risk: Implications of Basel II for Commercial Real Estate Lenders
June 1, 2004... All banks and their commercial real estate lenders may be affected directly or indirectly by Basel II, considered landmark in its scope. The goal of this article is to help clarify the nature of these changes and their implications for...

Ladies: Start Your Power Tools!
June 1, 2004... The title of this article isn't so strange if you have seen Joni Daniels, author of Power Tools for Women (1), open up her tool kit and get into action, In January 2004, this author, business turner, trainer, and consultant helped launch the RMA...

He Writes the Policies. Sound Credit Is Music to Bob De Buys' Ears, and His Artistry Is on Record at SouthTrust Bank-Maybe Even Compact Disk
June 1, 2004... Bob de Buys knows a thing or two about credit policy. In fact, you could call him the Barry Manilow of the credit policy at SouthTrust Bank. "You could say that," de Buys laughs. "He writes the songs, I write the policies!" While there is no...

Preparing for Basel II: Common Problems, Practical Solutions: Part 3: Model Validation
June 1, 2004... Previous articles in this series have focused on the problems of missing data and how to get the most out of the information you do have. This article offers some practical statistical advice for overcoming the challenges of validating a PD...

Probate Collections-Managing for the "Two-Minute Drill": Part 3: Developing an Appropriate Game Plan
June 1, 2004... Does the impact of death events currently have a place in your loan-loss-reserve analysis? Have you considered the operational risks inherent in the death of a customer--whether consumer or commercial? These topics are explored in this...

FAS Facts: What Will the AICPA, SEC, and Others Come Up with Next-And What Does It All Mean to You? RMA's Ongoing Series Looks at Implications for Bankers: SAB No. 105 GAAP and Derivatives
June 1, 2004... SAB No. 105, which talks about applying GAAP to mortgage-loan commitments accounted for as derivative instruments and entered into after March 31, 2004, should help bankers recognize their own and their clients' loan commitments more properly....

Microfinance: Part 2: Why and How
June 1, 2004... Part 1 of this article introduced the microfinance industry and related the impressive experiences of some of the largest microfinance lenders. Part 2 addresses the keys to successful microfinance lending, other developments in the international...

Road Map to Straight-Through Reporting: Part 1
June 1, 2004... "Straight-Through Reporting" (November 2003, by Michael Savelloni) focused on how XBRL and Web services can improve data integrity and timeliness while lowering the costs of internal reporting. As a follow-up, this article presents a road map to...