Considering the enormity of paperwork and requirements demanded by conventional lenders, it is incredulous that brokers send files that are so incomplete.
The most important component of a good file is the executive summary. Sometimes called a Pro-Forma or Summary, the Executive Summary is a general overview describing the borrower, the collateral, the request, and the compensation. It explains in outline terms what the borrower and broker are seeking in a condensed version, making it very simple to understand as the investor. Very often, this is all I need to decide if this is a file worth reviewing!
Here is a version of an effective executive summary for your review. Please feel free to use this as a template!
Loan Summary
Borrower: Bob & Sue Smith
Self-Employed Investors
Fico 620
Subject Property: 6238- 6240- 6242 First Avenue/Chula Vista, CA
Type of Property: Triplex
Rents: $900/mo, $900/mo, & $1200/mo
$ 3000/monthly income
Purchase Price: $350,000
Loan Request: $175,000 1st td Purchase Loan
Value: $350,000 (based on purchase price & Broker Price Opinion)
Loan To Value Ratio: 50%
History of Property: Borrower needs to 1031 into another rental after property was sold.
Use of Funds: Borrower’s are using funds to purchase property.
Exit Strategy: Borrower will refinance property, upon a year of rental roll seasoning. Borrower has good credit and property easily debt services to where an institutional lender would loan; however, borrower has purchased a short sale and due to the current lending environment, they cannot close quickly enough for short sale lender.
Collateral Offered: First Mortgage on Property
Items Included in File: 1003, executive summary, photos, credit report, proof of deposit, contract, title, escrow, closing statement from other property, short sale agreement letter.
Terms: Term to be 2-3 years. Broker Points to Joe Lender to be two (2) . Close of escrow to be 10 days or sooner
Submitted By: Joe Lender
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