Lawyers Can Seal the Deal
Fearful of a lawyer killing your deals? Most likely yes. Need that be the case? No. Can lawyers be better utilized in credit union lending? Absolutely yes.
I am often asked to speak to non-lawyers who work for lenders about the loan documentation process. Never about underwriting or loan commitments. But application-to-underwriting-to-commitment-to-loan documentation-to-closing is closely linked. And it is more than simply one, long hyphenated series of words. It's making the deal.
It is particularly important for lawyers to be involved in communicating with underwriters prior to commitment on certain issues. Some of these issues include:
- — "Wait a Minute Issues!" – Does the lawyer have any insight as to a legal hurdle that may preclude the loan from closing?
- — Special escrows – Are there special issues, and if so, how should they be handled?
- — Parcel releases
- — Properties unleased
- — Letter of credit issues
- — Ground lease transactions
- — Single-tenant properties
Good outside counsel may frequently provide input how underwriting problems can be resolved, so that lenders may help make the loan. In some instances, I may be drawn into pre-commitment review of matters (e.g., special title matters, ground lease matters, etc.) In these instances, I am able to make specific recommendations that make it possible for a particular loan to be approved or documented correctly.