Japan capital – Const Japan http://const-japan.com/ Sun, 17 Apr 2022 09:56:11 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://const-japan.com/wp-content/uploads/2021/07/icon-2021-07-05T131502.299-150x150.png Japan capital – Const Japan http://const-japan.com/ 32 32 Book excerpt: How RBI under Raghuram Rajan started the war against NPAs https://const-japan.com/book-excerpt-how-rbi-under-raghuram-rajan-started-the-war-against-npas/ Mon, 05 Jul 2021 06:08:22 +0000 https://const-japan.com/?p=79 The Reserve Bank of India (RBI) could sense that something was wrong but it was helpless as it did not possess the full picture. Until the establishment of the Central Repository of Information on Large Credits (CRILC) in June 2014, data on NPAs were disaggregated. The CRILC was Rajan’s initiative. Once it […]]]>

The Reserve Bank of India (RBI) could sense that something was wrong but it was helpless as it did not possess the full picture. Until the establishment of the Central Repository of Information on Large Credits (CRILC) in June 2014, data on NPAs were disaggregated.

The CRILC was Rajan’s initiative. Once it was in place, the banks started supplying data in real time for all loans of Rs 5 crore and above. For accounts turning bad, the data was weekly, while standard accounts were reported monthly.

Banks had to submit quarterly reports on all borrowers with an aggregate fund-based and non-fund-based exposure of Rs 5 crore or more. They also had to classify borrowers as Special Mention Accounts (SMA) of various levels to gauge the probability of such accounts turning bad…

Apart from regular quarterly submissions, the banks were advised to keep the regulator informed on a real-time basis whenever a large borrower’s account becomes overdue for 61 days (SMA-2) and/or banks were jointly planning to restructure such an account. The special mention accounts and the step by step classification of non-payment dealt a blow to the cosy relationships between banks and borrowers.

The RBI, as well as banks, could access this data. This gave a comprehensive view of the banking system’s exposure to every large borrower and how the exposure to the same borrower was classified differently by different banks. Most importantly, the central bank could see how funds were moved across banks to keep accounts ‘standard’.

It was clear that the situation was far worse than what the RBI had envisaged. In its worst nightmare, the regulator could not have imagined the terrible asset quality…

Risk-Based Supervision

Just a year before CRILC came into existence, the RBI had changed its supervisory model – from CAMELS (capital adequacy, asset quality, management, earnings, liquidity and system and control) to RBS or risk-based supervision…

Once this was done, RBI could see that even smaller banks had relatively large exposures to corporate accounts. Growth-hungry banks depended on the lead bank (in most cases, the SBI) for project appraisal and gave loans to large corporations even though their balance sheets could not justify such risk-taking. Technically, it is called multiple lending but, for all practical purposes, this was informal loan syndication.

No bank wanted to miss out the credit growth story. Between 2006 and 2009, bank credit grew at a scorching pace. It dipped after the Lehman crisis but started to pick up again in 2011.

Another factor that contributed to this trend was the memorandum of understanding public sector banks (PSBs) were signing with the government every year for their performance. The CMDs and executive directors were given a bonus every year. This was a pittance but it was linked to balance sheet growth and not the quality of assets.

In many cases, the banks appeared to be drafting the proposals as well as appraising them. The large banks, the bullying big brothers, were calling the shots in making decisions on which borrower to finance and by how much. The smaller banks were forced to fall in line.

The RBS opened a new can of worms.

The RBI discovered the following:

  • The default risk in almost all banks was extremely high. Typically, the default risk is measured in standard asset portfolio of the banks over and above the declared NPAs.

  • The recovery risk was also equally high because enough security had not been taken when loans were sanctioned. In most PSBs and some private banks, it was usual for the higher officials to permit deviations in security norms.

  • The stressed assets were relatively higher in industry and lower in agriculture.

  • Certain banks, particularly a few private banks, had efficient managers and their quality of loans was better.

  • The low-capitalised banks tended to take more risks for more returns as higher returns could help them build capital.

  • Highly profitable banks, too, tended to take more risks for better returns.

  • Banks with a diversified portfolio of retail and corporate loans had better balance sheets.

  • There were issues with sectoral and geographical concentration – such as real estate, steel, tea gardens in Assam, among others.

  • There were differences in the quality and quantity of collaterals held by different banks.

  • There was rampant misuse of the general-purpose loans to companies for business. The banks were giving such loans to tide over liquidity crisis and thus, keep accounts performing.

Once the RBS was in place, most banks were downgraded at least by one notch and many even lower, subsequently.

The regulator’s concerns were on multiple grounds:

  • Poor credit assessment of banks.

  • Lack of monitoring of loan accounts.

  • The banks did not assess the high leverage of corporate borrowers.

  • The borrowers were siphoning off money and the banks could not track that.

  • The promoters’ contribution and personal guarantee for loans were only on paper; in most cases, they were not charged to banks and hence unenforceable.

  • The banks were restructuring the loans by giving fresh loans but the promoters were not bringing in any contribution in the form of equity.

  • There was a concentration of risk as all banks were rushing to lend to certain sectors such as steel and infrastructure, without the skills required to appraise projects in those areas.

  • The banks were putting in a lot of conditions before disbursing a loan but waiving many terms later. For instance, a large steelmaker threw in many pieces of prime real estate in Mumbai as collateral. But later it convinced the banks to release the real estate as the project itself (land, plant and machinery) was hypothecated to the banks. The problem was that the land of such projects could not fetch much money and the plant and machinery turned into scrap.

Were the banks compromised? The RBI did not explicitly say so. But it found that, after the sanction of loans, if the supervision was bad, monitoring was worse. Since the project appraisal was done by the lead bank, others were relaxed. Also, the bankers were taking borrowers’ commitments at face value.

Another ingenious system of managing bad loans was discovered. When a string of accounts was on the verge of turning bad, the bank typically created a pool of debt covering all, got it rated by a not-so-reputable rating agency, and sold it to relatively smaller banks, including cooperative banks. This practice of down-selling or palming off of bad loans was invented by a private bank, which later came close to collapse.

Yet another clever way of managing bad assets was sanctioning two loans at the same time. While the first loan would be disbursed immediately, the disbursement of the second loan was typically kept on hold and, the second loan got disbursed to help the borrower if the first loan turned bad!

CRILC Review

By November 2014, Rajan called for a review of CRILC, which had been in operation for six months by then. The focus was on how banks were reporting their bad loans. Every account worth Rs100 crore or more was scrutinised.

By that time, the banks had stopped ‘restructuring’ bad loans but ‘rectification’ was being done. To its horror, the RBI found that rectification had replaced restructuring and most large accounts were rectified. How could every large borrower have a cash crunch?

Around the same time, at a workshop on the new supervisory model, the RBI assessed the progress of the risk-based supervision. The Department of

Banking Supervision (DBS) of the central bank decided that a thematic review should be undertaken on important aspects of credit, market and operational risks.

To start with, it was decided that the asset quality of the big banks be simultaneously reviewed. In March 2015, the process was complete and Rajan was informed.

The Cat out of the Bag

Around half-a-dozen large banks including SBI, PNB, ICICI Bank and Axis Bank were asked to make presentations to the RBI. The regulator got a clear sense of what was happening. The cat was out of the bag.

Deputy Governor S.S. Mundra and Governor Rajan decided to take a closer look. They put the largest 100 borrowing accounts in each bank under the scanner.

What started with a basket of 100 large accounts expanded manifold. What were small accounts for say a large bank such as SBI were large accounts for a smaller bank such as Dena Bank, or Bank of Maharashtra. Hence, even with the focus on 100 large accounts of each bank, the RBI ended up scrutinising thousands of accounts.

Rajan and Mundra discovered accounts which were registered as NPAs in one bank were supposedly performing assets in another. Many accounts were not restructured but these had been rectified repeatedly.

Rajan’s patience was running out. Enough time had been given to the banks for restructuring stressed loans but they were misusing it, and trying to take the regulator for a ride.

First of its Kind

That exercise by Mundra–Rajan unearthed so many problems that the RBI decided that a system-wide audit was needed. This is how the asset quality review or AQR – a first-of-its-kind health check of Indian banking – was conceived.

Globally too, there was nothing comparable to the AQR anywhere. After the collapse of Lehman Brothers, the US Federal Reserve started conducting sensitivity test and solvency tests to identify bank which could become basket cases but the banking tuft in the US is very different.

Most US banks have exposure to market instruments and this makes it easier to flag problems. If a bond is issued and not serviced, there’s an issue. But Indian banks are primarily in the business of giving loans. Loans work via agreements between borrower and bank, and banks can accommodate borrowers in many ways.

Typically, the annual RBI inspection starts after July when the banks have released their audited results; this is the second quarter of the Indian financial year. The inspection continues through the financial year until the end in March of the next calendar year. Depending on the seriousness of the findings of inspection teams, interactions with the bankers can continue for months.

A simultaneous look at all banks through the AQR is a very different story.

Anxious Bankers

During financial year 2014–15, bankers were looking anxious. They were ‘negotiating’ for regulatory forbearance. The RBI could sense the unease in the same way that a doctor feels there’s something wrong about a patient.

Everyone agreed that something had to be done. But when and how? Who will bell the cat? Did the banks have the capital to absorb the shock of new NPAs?

The AQR involved the focussed direction of supervisory resources. It would throw new light upon risks within the system. The DBS planned the scope, modalities and execution meticulously. An AQR team was constituted with the governor as its chairman, and all the proposals of the DBS were discussed by this team.

The Go-ahead

The AQR process started in June 2015, after Rajan gave the go-ahead. It was a three-month project, slated to be completed by August 2015 so that the recognition of bad assets could start from the September quarter. But it spilled over to October.

The clean-up process started from the October–December 2015 quarter.

This is how it worked.

India has over 100 banks. But very small ones, particularly foreign banks with small balance sheets and no corporate accounts, were left out of the exercise. The RBI used all the resources at its disposal to make a success of the AQR.

A team was formed for each bank, and all teams worked simultaneously.

Typically, a senior supervisory manager (SSM) looks after the audit of a bank. The rank of the SSM depends on the bank being audited. An SSM supervising SBI could be a general manager at RBI, but the SSM of a relatively smaller bank could be a deputy general manager or even as assistant general manager. For large banks, a team of four executives can work under the SSM.

The Control Room

The AQR team was like a financial bomb-disposal squad, trying to defuse explosives which could destroy the depositors’ trust – the bedrock of banking.

A control room was set up on the third floor of RBI’s Cuffe Parade office, away from its central office on Mint Road. Two general managers were collating the real time data; a third general manager was consolidating them under different heads; and a fourth one was looking at the big picture on the computer screen.

The chief general manager in charge of DBS was heading the control room. For six months, the team hardly slept. All of them worked flat out, even over the weekends.

Every evening the Cuffe Parade team would come over to the central office to take stock of the situation. Over poha and coffee from the canteen, the meetings would carry on at least till 10 pm. But quite often, there would be calls at midnight, or later, from senior colleagues who stayed tuned in 24×7.

Slowly, a big picture emerged. Typically the team discovered anomalies. Account ‘A’ was a performing asset on the book of Bank X but non-performing asset on Bank Y’s book and a stressed asset on the book of Bank Z.

How could that happen?

Well, there are many ways:

  • Routing the same credit through multiple banks

  • Raising temporary finance to service debt from other private and foreign banks under multiple bank finance.

  • Switching to different finance models.

  • Creative products such as capex loans – an all-purpose, no-appraisal sort of loan repayable at the borrowers’ convenience with incredibly long tenures and full repayment only on maturity.

  • Hiking the borrowers’ cash credit limit, allowing them to draw more money to pay back loans.

  • Misuse of export guarantee covers.

  • When Letters of Credit (LCs) were devolving, banks were not recognising devolvement.

  • Giving short-term overdrafts to borrowers to repay loans.

  • Offering fresh loans at the next stage to adjust the overdraft.

  • Artificially raising the sales volumes to lift the limit of bank borrowing.

  • Blatantly misusing the CDR platform for restructuring.

  • Seeking personal guarantees of the promoters but not invoking them.

  • Arbitraging between fund-based and non-fund based exposure by manipulating respective limits.

  • Most of the technical evaluation studies were rotten. While the borrowers were faltering on every business parameter, the studies were justifying higher credit limits.

  • The date of commencement of commercial operation (DCCO), a critical milestone for any project loan, was manipulated. Often, there was a date on which a factory ceremonially opened. But there was no production. It was just a formality.

The DCCO is the date when the unit is supposed to begin operations. The sales and other financial projections, including the repayment schedules for the loans, are based on this date.

The more the date was postponed, the longer the tenure of the loan and the bigger the interest liability and hence the higher the probability of the loan going bad. The restructuring norms permitted postponements of DCCOs in certain circumstances, but this was rampantly misused.

The RBI found that the banks were delaying recognising large accounts as NPAs, even if projects were not starting up, and the ‘project commencement’ milestone was largely cosmetic.

In one such case, the RBI team found that a huge sum of money had been deployed overseas for oil and gas exploration. But just an Internet search revealed that the oil field the banks had funded in Africa had already been identified as dry by a major oil company.

This prompted the regulator to launch ‘targeted scrutiny’ of certain accounts and ‘thematic scrutiny’ of real estate, housing loans, bills and letter of credit discounting.

It also went for ‘targeted audits’ of certain accounts by external auditors to red- flag misdoings. The banks themselves were appointing such auditors, at the instance of the regulator.

House of Cards

Given the scale at which the system was being gamed, the RBI had to opt for carpet bombing.

Among other things, it found innovative usage of the so-called standby letter of credit. This is a guarantee by one bank, based on which another bank would lend. The RBI found these were used as chain letters – Bank A was giving money, based on a guarantee by Bank B, then it was passed on Bank C, D, E, F and so on.

The same bank was becoming the guarantor as well as the lender. This was a house of cards but no bank involved in this chain would ever invoke a guarantee, since that would bring the house down. The borrowers had no skin in the game; the bankers were funding both debt and equity.

Instead of paying banks’ money from their own pockets, the borrowers were also using accommodation bills to service the principal plus interest of previous bills. Backed by the new bill, they would get fresh and higher credit, which would enable them to clear the previous loans and the chain continued.

As if this was not enough, there was also round-tripping.

Round Tripping

One of the SSMs found a large account in a very large bank, let’s call it Bank A, had not been serviced on the 90th day. Why was Bank A not classifying this loan as an NPA? The SSM was informed the required funds would flow into its account before the end of the 90th day. Indeed, the money arrived and the SSM was impressed – here was a banker who did not believe in hiding facts.

There was no need to classify that account as an NPA. So, it was maintained as a standard asset. But just out of curiosity, the SSM checked the CRILC data the very next day.

Lo and behold, to his horror, he found an equivalent amount of money had left Bank A and gone to another bank, Bank B. He couldn’t believe his eyes. But one phone call to his counterpart in Bank B confirmed his suspicions. But the story did not end there! The funds left Bank B a day later and entered the books of a third bank, Bank C.

What was going on?

These banks were keeping the account standard simply by transferring money from one bank to another, to yet another. In such chains, as many as ten banks might have sanctioned a loan to one borrower. But the dates of sanctions and disbursements were different, allowing for the round-tripping. It may be inferred that loans were applied for, and sanctioned, on different dates deliberately to enable this sidestep of the NPA recognition norms.

The Next Step

Broadly, the AQR findings can be divided into four categories:

  • Banks were piling up NPAs but not recognising them.

  • They were camouflaging NPAs through fresh loans and other innovative ways.

  • The CDR platform for restructuring stressed assets had failed.

  • The date of commencement was being gamed. Many projects had not got going on the formal commencement dates.

There were long discussions about the next step. Deputy governor Mundra was conservative in his approach and wanted to give more time to banks. But his boss Rajan thought the rot was too deep. He could not accept the manipulation of the DCCO.

What next? It was decided to analyse all the findings once again, in stages.

At stage one, the focus was on what they call ‘quality assurance’. Here, three CGMs and the CGM in-charge of DBS analysed the tabulated data. They followed up with a series of meetings with the group of SSMs to get a clearer picture before confirming each NPA account.

Once the consolidated picture emerged, at stage two, a presentation was made to Mundra, Rajan and the executive director in charge of supervision, Meena Hemchandra.

At stage three, the RBI supervision team met the bankers one-on-one and discussed the findings. The venue was the Cuffe Parade office, which resembled a sort of Scotland Yard during these meetings. The bankers were not grilled but the

RBI team had every detail on the table to confront them. There was documentary evidence to support every point they were making.

After the meeting with the bankers, at stage four, a second round of checks was undertaken, with the bankers’ feedback and more facts.

At stage five, it was decided that 30 of the largest accounts must undergo a second level of quality assurance check. This was done by senior executives of the supervision team who had not been involved in the exercise. They were flown in from Delhi and Chennai for a third-party check.

At stage six, the control room did an assessment of the impact. If the banks were to recognise all bad loans at one go and set aside money, how would it affect their NPA pile, capital and profitability? The team looked at the last three years’ profits, presumed a 5 per cent rise each year and worked out different scenarios on the assessed NPA figures to estimate the impact.

Once the exercise was over, the team went back to Rajan to make the final presentation, drawing up different scenarios about the capital requirement for public sector banks.

Before biting the bullet, at the last stage, Rajan called a meeting of the bankers at the RBI central office on Mint Road. All big banks present there were vociferous in their protests. The boss of a large bank said the RBI was not following the rules, and the decision to force the banks to clean up the bad loans was principle-based.

A rules-based approach to regulation prescribes in detail a set of rules on how to behave as opposed to a principle-based approach to regulation where outcomes and principles are set and the controls, measures and procedures on how to achieve that outcome is left for each organisation to determine.

Is this True?

In his typical style, Rajan asked the team one simple question: ‘Is this true?’

The 15th floor conference room at the central office has seldom seen a debate as animated as the one that occurred. The team explained graphically to the governor how every rule was followed and nothing was left to principles.

It backed up this argument with multi-level evidence. The bankers had no choice but to accept what the RBI team was saying.

Immediately after the bankers’ meeting, Rajan spoke to the junior minister of finance, Jayant Sinha, who had been his classmate at IIT Delhi, on a video conference.

Sensing the imminent collapse of all the creative scheming, borrowers and bankers started lobbying in Delhi to stop the inevitable. They sought the shoulders of influential ministers to cry on.

In November, Rajan, along with Mundra and the chief general manager in charge of DBS, flew to Delhi to meet finance minister, Arun Jaitley. The mission was to convince Jaitley that the clean-up exercise could not be avoided.

The finance minister gave them a patient hearing, got a sense of the capital requirement for the banks and gave the go-ahead. His junior minister Sinha and Anjuly Chib Duggal, the financial services secretary, were present at the meeting. The next day, Jaitley announced the government was ready to clean up the banking system. It came up for discussion next month, on 11 December, at RBI’s 555th Central Board meeting in Kolkata.

Excerpted from Pandemonium: The Great Indian Banking Tragedy by Tamal Bandyopadhyay, courtesy Roli Books. Releasing on 9 November 2020, Price Rs 695.

POLITICO Playbook: Edging closer to shutdown with Trump showing no signs of caving https://const-japan.com/politico-playbook-edging-closer-to-shutdown-with-trump-showing-no-signs-of-caving/ Mon, 05 Jul 2021 05:53:02 +0000 https://const-japan.com/?p=61 President Donald Trump’s aides and allies are working to try to get him to reverse his stance, with evidently little success. | Patrick Semansky/AP Photo THE GOVERNMENT SHUTS DOWN TOMORROW NIGHT AT MIDNIGHT. Unemployment benefits have already run out. But the president, comfortably enveloped at his Mar-a-Lago resort in Palm Beach, seems to be growing […]]]>

THE GOVERNMENT SHUTS DOWN TOMORROW NIGHT AT MIDNIGHT. Unemployment benefits have already run out. But the president, comfortably enveloped at his Mar-a-Lago resort in Palm Beach, seems to be growing more indignant that the rescue package deal his treasury secretary cut with Congress is insufficient. He is showing no signs whatsoever that he is going to sign it. NYT’s Emily Cochrane with more on the state of play

TRUMP at 12:38 a.m.: “Increase payments to the people, get rid of the ‘pork’.” … at 12:36 a.m., linking to his video in which he announced his gripes with the bill: “Speaking for America!” … at 9:56 p.m.: “$2000 + $2000 plus other family members. Not $600. Remember, it was China’s fault!” … at 9:10 a.m. Saturday: “I simply want to get our great people $2000, rather than the measly $600 that is now in the bill. Also, stop the billions of dollars in ‘pork’.”

THE PRESIDENT’S AIDES and allies are working to try to get him to reverse his stance, with evidently little success.

THIS MAY BE THE LEAST LOGICAL fight of TRUMP’S presidency. In the past, he turned on Congress when they ignored him — see the shutdown after the 2018 midterm election, when they left out money for his border wall. TRUMP didn’t make this ask until after the deal was cut.

AND WHAT ABOUT STEVEN MNUCHIN, the eager-turned-scorned Treasury secretary, who seemed to revel in his prowess to make deals with Democrats. What a humiliating episode for him.

— WAPO’S JEFF STEIN: “Mnuchin’s loyalty to Trump could end with painful setback as president shreds stimulus deal”

KEEP AN EYE ON THIS: In the Democrats’ $2,000 check bill from last week, they included language that would make it contingent on TRUMP signing the overall Covid/funding bill. THE LANGUAGE: “b) EFFECTIVE DATE.—The amendments made by this section are contingent upon the enactment of the COVID-related Tax Relief Act of 2020 and shall apply (if at all) as if included in the enactment of section 272 of such Act.”

PRESIDENT-ELECT JOE BIDEN criticized TRUMP on Saturday in a statement for his refusal to sign the Covid relief and government funding bill calling it an “abdication of responsibility.”

SUNDAY BEST … RETIRING SEN. PAT TOOMEY (R-Pa.) told MIKE EMANUEL on FOX NEWS’ “FOX NEWS SUNDAY” that he didn’t know if there would be a government shutdown. However, he made a damning prediction if TRUMP shuts down the government and doesn’t sign the Covid package TRUMP will be “remembered for chaos and misery and erratic behavior.”

— ON IF THEY HAVE THE VOTES FOR A VETO OVERRIDE: “Well, I think we’ll find out pretty soon. This legislation has been passed by Congress every year for I think about 60 years running. It’s when signed by presidents. I think it does put the right priorities behind our defense policy and it passed both houses with huge overwhelming votes. But we’ll see. That’s why you have the vote.”

— ON TRUMP’S PARDONS: TOOMEY said he agreed with MIKE FLYNN getting pardoned, but said in “some of these other cases, my goodness, we have tax fraud and bank fraud, witness tampering, obstruction of justice, but because they were close to the president they got pardoned.”

SEN. BERNIE SANDERS (I-Vt.), who has been pushing for $2,000 direct payment checks, told JONATHAN KARL on ABC’S “THIS WEEK” that he hadn’t heard “a word” from TRUMP about the issue while they were negotiating the deal and that “everybody assumed, everybody, that Mnuchin was representing the White House.”

— ON IF BIDEN’S CABINET PICKS ARE PROGRESSIVE ENOUGH: “Well, what I have said many, many times is the progressive movement itself probably is 35 or 40 percent of the Democratic Coalition. And I believe that the progressive movement deserves seats in the Cabinet, that has not yet happened.

“So I would like to see strong progressives in the administration who are going to stand up for the working families of this country, who believe that health care is a human right, who believe we’ve got to make sure that public colleges and universities are tuition free and that we have to be aggressive on issues like climate change, racial injustice, immigration reform.” More from David Cohen

KARL also interviewed Maryland Republican Gov. LARRY HOGAN and asked him why more Republicans aren’t standing up to the president. HOGAN: “Well, I think more and more are and will. And I can tell you, there’s an awful lot of concern right now. I mean, Republicans were put in this position, a lot of them came to support this bill even though they didn’t like everything that was in it, even though perhaps it didn’t have all the things we needed in it. …

“And if the president wants to come up with more money to help more people, terrific. Let’s sign this bill now so we can start getting our unemployment benefits out right away, and then quickly pass another bill.”

ALSO WORTH WATCHING: REP.-ELECTS CORI BUSH of Missouri and JAMAAL BOWMAN of New York would not tell DANA BASH on CNN whether they would back NANCY PELOSI for Speaker. (h/t Lauren Fox)

Good Sunday morning.

THE LATEST IN NASHVILLE — “Nashville explosion investigation prompts FBI to search home,” by AP’s Kimberlee Kruesi, Michael Balsamo and Eric Tucker: “Federal agents converged Saturday on the home of a possible person of interest in the explosion that rocked downtown Nashville as investigators scoured hundreds of tips and leads in the blast that damaged dozens of buildings on Christmas morning.

“More than 24 hours after the explosion, a motive remained elusive as investigators worked round-the-clock to resolve unanswered questions about a recreational vehicle that blew up on a mostly deserted street on a sleepy holiday morning and was prefaced by a recorded warning advising those nearby to evacuate. The attack, which damaged an AT&T building, continued to wreak havoc Saturday on cellphone service and police and hospital communications in several Southern states.

“Investigators from multiple federal and local law enforcement agencies were at a home in Antioch, in suburban Nashville, after receiving information relevant to the investigation, said FBI Special Agent Jason Pack. Another law enforcement official, who was not authorized to discuss an ongoing investigation and spoke to The Associated Press on condition of anonymity, said investigators regard a person associated with the property as a person of interest.

“Federal agents could be seen looking around the property, searching the home and the backyard. A Google Maps image had shown a similar recreational vehicle parked in the backyard when the photo was captured in May 2019; an AP reporter at the scene did not see the vehicle at the property in the late afternoon Saturday.”

— WAPO: “Gunfire, warnings, then an explosion: What videos show about the Nashville bombing,” by Joyce Sohyun Lee and Elyse Samuels

— MARGARET BRENNAN spoke with Nashville Mayor JOHN COOPER on CBS’ “FACE THE NATION” about the explosion. BRENNAN: “CBS is reporting that a person of interest in this explosion has been identified. Is there any update yet on the motive behind this bombing or who carried it out?”

COOPER: “Well, there’s no update yet, but I think everybody feels like there is a lot of momentum behind the investigation, and I expect a lot of answers — a lot of questions will be answered relatively soon. We’ve got hundreds of agents on the ground working very hard.”

THE CORONAVIRUS CONTINUES TO RAGE … 18.9 MILLION Americans have tested positive for the coronavirus … 331,929 Americans have died.

— ANTHONY FAUCI told BASH on CNN’S “STATE OF THE UNION” that he agreed with BIDEN that the worst is yet to come in the pandemic. “And the reason I’m concerned and my colleagues in public health are concerned also is that we very well might see a post-seasonal, in the sense of Christmas, New Year’s, surge, and, as I have described it, as a surge upon a surge, because, if you look at the slope, the incline of cases that we have experienced as we have gone into the late fall and soon-to-be-early winter, it is really quite troubling. …

“If you put more pressure on the system by what might be a post-seasonal surge because of the traveling and the likely congregating of people for the good, warm purposes of being together for the holidays, it’s very tough for people to not do that.”

“Adm. Giroir: Not clear if Christmas travel will lead to surge in Covid cases,” by David Cohen: Adm. Brett Giroir said Sunday it’s too early to tell if a spike in travel during the Christmas season will lead to a spike in Covid-19 cases. ‘It really depends on what the travelers do when they get where they’re going,’ Giroir said on ‘Fox News Sunday.’”

— SOLVING THE DISTRIBUTION PROBLEM: “Churches, groceries and vans: How states plan to get vaccines to poor communities,” by Joanne Kenen

— ON THE GROUND: “Inside a Rhode Island field hospital, preparing for the worst of the pandemic,” by WaPo’s Lenny Bernstein in Cranston, R.I.

— IN EUROPE: “Believe in science:” EU kicks off COVID-19 vaccine campaign,” by AP’s Nicole Winfield and Vanessa Gera in Rome: “Doctors, nurses and the elderly rolled up their sleeves across the European Union to receive the first doses of the coronavirus vaccine Sunday in a symbolic show of unity and moment of hope for a continent confronting its worst health care crisis in a century.

“Even though a few countries started giving doses a day early, the coordinated rollout for the 27-nation bloc was aimed at projecting a unified message that the vaccine was safe and Europe’s best chance to emerge from the pandemic and the economic devastation caused by months of lockdown.

“For health care workers who have been battling the virus with only masks and shields to protect themselves, the vaccines represented an emotional relief as well as a public chance to urge Europe’s 450 million people to get the shots for their own health and that of others.”

— DEEP DIVE: “The CDC’s failed race against covid-19: A threat underestimated and a test overcomplicated,” by WaPo’s David Willman

WSJ’S TED MANN and BRODY MULLINS: “Texas Fracking Billionaires Drew Covid-19 Aid While Investing in Rivals”: “As the coronavirus pandemic and low oil prices walloped U.S. frackers this spring, Texas billionaires Dan and Farris Wilks got a $35 million relief loan to help one of their fracking companies stay afloat. At the same time, they were on a buying spree in the country’s oil patch.

“Since spring, businesses controlled by the Wilks brothers have hunted for deals among fracking firms going through bankruptcy and taken or increased stakes in at least six other companies, corporate filings show. But when it looked like the oil-and-gas industry would be shut out of a key pandemic lending program, they and others in the industry turned their attention to Washington, making an appeal for help in meetings with home-state senator Ted Cruz.

“The twin dynamics of acquisitions and government rescue show how the economic tumult caused by the pandemic has reshaped the landscape for a key U.S. industry. One result: The Wilkses have expanded their presence in a still-youthful industry where they first invested in 2002, soon to become billionaires as fracking flourished.” WSJ

THE LATEST IN GEORGIA — “Warnock and Loeffler work to consolidate voters for runoff,” by AP’s Jeff Amy in Atlanta: “One thing helping line voters up is the decision of the candidates in both races to run as tickets, with joint appearances and advertisements. J. Miles Coleman of the University of Virginia Center for Politics said the joint effort has helped Warnock wrap up Democratic voters.

“‘He and Ossoff have done a better job of running as a ticket,’ Coleman said. ‘I think overall that’s going to benefit Warnock and help him consolidate some of his support.’ With the candidates running as tickets, it’s unlikely the parties will split the seats. Two wins would put Democrats in control of the U.S. Senate with Vice President-elect Kamala Harris breaking a 50-50 tie. A split or two GOP wins would keep Republicans in control.” AP

TRUMP’S SUNDAY — The president has nothing on his public schedule.

BIDEN and VP-ELECT KAMALA HARRIS will meet with transition advisers.

NYT’S JIM RUTENBERG, NICK CORASANITI and ALAN FEUER: “Trump’s Fraud Claims Died in Court, but the Myth of Stolen Elections Lives On”: “After bringing some 60 lawsuits, and even offering financial incentive for information about fraud, Mr. Trump and his allies have failed to prove definitively any case of illegal voting on behalf of their opponent in court — not a single case of an undocumented immigrant casting a ballot, a citizen double voting, nor any credible evidence that legions of the voting dead gave Mr. Biden a victory that wasn’t his.

“‘It really should put a death knell in this narrative that has been peddled around claims of vote fraud that just have never been substantiated,’ said Kristen Clarke, the president of the National Lawyers’ Committee for Civil Rights Under Law, a nonprofit legal group, and a former Justice Department attorney whose work included voting cases. ‘They put themselves on trial, and they failed.’

“Yet there are no signs that those defeats in the courts will change the trajectory of the ongoing efforts to restrict voting that have been core to conservative politics since the disputed 2000 election, which coincided with heightened party concerns that demographic shifts would favor Democrats in the popular vote.”

— ERIC GELLER: “Forget the conspiracy theories — here are the real election security lessons of 2020”: “The foreign cyberattacks that so many intelligence officials feared didn’t upend the 2020 elections — but this year’s contests nonetheless showed how much the nation still needs to do to fix its security weaknesses.

“Paper trails protected the integrity of the votes in closely watched states, thanks to hundreds of millions of dollars in federal aid, but many counties still lack that protection. States mostly rejected the riskiest voting technology — internet balloting — but a few embraced it. And a pandemic-ravaged nation managed to vote safely and reliably, but election offices are still woefully short of money and staff.

“Perhaps most of all, this year also exposed the United States’ vulnerability to election threats from within, as President Donald Trump and other leading Republicans promoted discredited conspiracy theories to try to nullify President-elect Joe Biden’s victory.

“‘The big picture lesson from 2020 is that ensuring an accurate result isn’t enough,’ said J. Alex Halderman, a University of Michigan computer science professor and leading election security expert. ‘Elections also have to be able to prove to a skeptical public that the result really was accurate.’”

BUSINESS BURST — “Consumer Brands Bet Working From Home Is Here to Stay,” by Annie Gasparro and Sharon Terlep: “Consumer-product companies are expanding factories and revamping production lines, wagering that work-from-home habits like growing beards and fixing quick lunches will outlast the coronavirus pandemic. Millions of Americans spent much of the year working from home. While legions of employers are planning to reopen their offices, many have said they would let employees continue working remotely some or all of the time once the pandemic subsides.

“As a result, many food-and-consumer-products companies are investing in factories, equipment and brands to provide more of those items for years to come, seeking to accommodate consumers who are making more coffee, buying more casual clothes and tending beards with trimmers and balm rather than shaving them off.

“Conagra Brands Inc. and Kraft Heinz Co. are buying and upgrading equipment to make more at-home lunch foods. General Mills Inc. has added a manufacturing line for Cinnamon Toast Crunch cereal at a Georgia factory, which the company said is one of its most expensive capital projects ever. Kimberly-Clark Corp. is converting a plant to make toilet paper for homes instead of offices, and Procter & Gamble Co. is adding beard-care products in addition to Gillette razors.”

Send tips to Eli Okun and Garrett Ross at [email protected].

IN MEMORIAM … CNN’S ANDREW KACZYNSKI: “Francesca Kaczynski, also known as Bean, Beanie or Beans, died December 24th of complications from cancer. She was nine months old. In her short life, Francesca was an outgoing, bold and curious baby. She had huge, deep brown eyes that followed whatever her parents were doing. She loved eating and being held close, particularly in the evenings.

“A Brooklyn-based Sesame Street fan, Francesca enjoyed taking long walks around New York City and Boston, playing with her toys and balloons, attending speech therapy, and ‘petting’ (i.e. grabbing) her cat Ryland. One of her favorite activities was to practice rolling in her crib from side to side. She loved seeing her parents, Andrew Kaczynski and Rachel Ensign, and greeting them with the world’s biggest smile and an excited kick when she woke up from a nap.” MediumFundraiser benefiting pediatric oncology and ATRT research at Dana-Farber Cancer Institute

ENGAGED — Ian Sams, a Democratic consultant and Kamala Harris and Hillary Clinton alum, and CadeAnn Smith, a contract attorney for the Justice Department, got engaged on Christmas morning at their apartment in D.C. The two met while students at the University of Alabama. Pic

WELCOME TO THE WORLD — Rodell Mollineau, partner at ROKK Solutions, and Sheena Mollineau, senior manager at PWC, welcomed Broderick “Brody” Franklin Mollineau on Monday. Pic

BIRTHDAY OF THE DAY: Laura Lott, president and CEO at the American Alliance of Museums. A trend she thinks doesn’t get enough attention: “There are significant shifts in the world of philanthropy, and they will have deep and lasting effects on nonprofit organizations, especially in the world of arts and culture. Whether it’s the younger generation and their giving priorities aimed at measurably solving societal ills, or wealthy philanthropists donating enormous sums to name buildings, museums’ reliance on private philanthropy is unsustainable. Many people are surprised to learn that museums receive very little financial support, on average, from federal, state and local government. With the ongoing disruption in private philanthropy, many organizations have a once-in-a-generation window of opportunity to reinvent themselves and attempt new business models.” Playbook Q&A

BIRTHDAYS: GSA Administrator Emily Murphy … Rep. Jeff Fortenberry (R-Neb.) is 6-0 … … Geri Palast … Rep. Abby Finkenauer (D-Iowa) is 32 … Yael Belkind … Julie Benkoske (h/ts Teresa Vilmain) … Savannah Guthrie, “Today” show co-anchor and NBC News chief legal correspondent … former Rep. Joe Walsh (R-Ill.) is 59 … Mercedes Schlapp … Kurt Volker is 56 … Trygve Olson, president of Viking Strategies … Brennan Bilberry … Andi Lipstein Fristedt of the Senate HELP Committee … Glen Carey … Bill Connor … Jacqueline Policastro, Gray Television’s D.C. bureau chief … Osaremen Okolo … Jessica McCreight Brown … Marc Smrikarov of Chatham Strategies and Swing Left … James Burnham … Andi Pringle … Emily Hytha, comms director for the House Agriculture GOP …

… Kamau Marshall, senior adviser for the Presidential Inaugural Committee … Jeb Fain is 35 … Joseph Grieboski … TPM’s Tierney Sneed … Joe Harris … Josh Litten … Moyer McCoy … Alex Baren … Alex Milwee … Holli Holsan … Karen Hughes, worldwide vice chair of BCW Global … Healthsperien’s Ethan McChesney and Eddie Garcia … Sheri Treadwell … POLITICO Europe’s Shéhérazade Semsar, Tim Ball and Nick Vinocur … Ben Lazarus … Arthur Kent is 67 … Dale Vieregge … Benji Backer, president of the American Conservation Coalition, is 23 (h/t Karly Matthews) … Jessica Bachman … Hemanshu Nigam … Mike Thomas is 52 … Barclay Palmer … Joseph Collins … Sarah Guinan Nixon … Andrew Chesley … Catherine Marx

EasyJet raises $ 1.9 billion in partially secured loan | New https://const-japan.com/easyjet-raises-1-9-billion-in-partially-secured-loan-new/ Tue, 09 Mar 2021 10:57:03 +0000 https://const-japan.com/easyjet-raises-1-9-billion-in-partially-secured-loan-new/ EasyJet has raised a $ 1.87 billion loan which is partially guaranteed by the UK Export Credit Agency. The five-year loan is underwritten by a syndicate of banks, according to the low-cost carrier, and backed by a partial guarantee from UK Export Finance as part of its Export Development Guarantee program. This program is available […]]]>

EasyJet has raised a $ 1.87 billion loan which is partially guaranteed by the UK Export Credit Agency.

The five-year loan is underwritten by a syndicate of banks, according to the low-cost carrier, and backed by a partial guarantee from UK Export Finance as part of its Export Development Guarantee program.

This program is available to UK companies and does not involve preferential rates or require approval of state aid, and contains restrictive covenants, particularly with regard to the payment of dividends.

EasyJet says these are compatible with its existing dividend policy.

The five-year facility will be secured on the planes upon drawdown and “will significantly expand and improve” the debt maturity profile of the Luton-based airline and boost its liquidity, it adds.

Cirium understands that 10 or 11 banks are involved in the loan facility. These include Santander, Citi, BNP Paribas and Societe Generale as coordinated lead managers.

The loan is 80% guaranteed by UKEF, with the banks taking the remaining 20% ​​risk. Funding is secured by a mix of old and new aircraft from the Airbus A320 family.

A source tells Cirium that the loan will be secured by around 70 to 80 jets.

The lending is at commercial market rates, with the main benefit for EasyJet being that banks can avoid the concentration of name and industry risk when lending to the UK carrier.

The financing comes after British Airways, owned by IAG, secured a £ 2 billion ($ 2.66 billion) loan at the end of December with a partial guarantee from UKEF.

During the first quarter, EasyJet plans to repay and cancel some of its shorter-term debt, namely its $ 500 million fully drawn revolving credit facility and its approximately £ 400 million term loans. sterling.

This will free up a number of aviation assets to further strengthen the airline’s balance sheet, he said.

EasyJet has now raised more than £ 4.5 billion in cash since the start of the pandemic. This includes a number of aircraft sale and leaseback transactions.

Manage increased loan volume by automating document collection processes https://const-japan.com/manage-increased-loan-volume-by-automating-document-collection-processes/ Tue, 09 Mar 2021 10:57:03 +0000 https://const-japan.com/manage-increased-loan-volume-by-automating-document-collection-processes/ SPONSORED CONTENT PRESENTED BY FILEINVITE The job has changed. But has he changed enough? For some, the dramatic retooling has brought significant benefits. For others, it simply mimicked traditional processes in a digital model, producing a “waste in, waste out” situation. Major lenders not only survived but thrived, and part of the winning combination was […]]]>


The job has changed. But has he changed enough? For some, the dramatic retooling has brought significant benefits. For others, it simply mimicked traditional processes in a digital model, producing a “waste in, waste out” situation. Major lenders not only survived but thrived, and part of the winning combination was aligning digital evolution with business priorities.

In the feast or famine of volatility, lenders have generally feasted, and the challenge has been to strike a delicate balance between seizing opportunities without sacrificing employee well-being or customer satisfaction. By automating the tedious document collection process, innovative lenders have been able to capitalize on increased opportunities, alleviating the workload of existing staff and reducing the need to hire new staff under uncertain business conditions.

20th century technology for a 21st century challenge

Lenders using 20th century tools like email, spreadsheets, and customer relationship management (CRM) suites have found them insufficient to meet the demands of the modern workplace. In the loan application process, a large volume of documents must be collected for the transaction to proceed. Obsolete systems that rely on many manual steps negatively impact the ability to speed up loan closing times.

Downstream, this affects larger business issues, including time to revenue generation, the quality of the customer experience, and the visibility businesses need to forecast for critical decision making. What is perhaps worse is the escalating risk in those inboxes: personal information that is not being handled in accordance with privacy laws.

Fortunately, tools that deliver speed, efficiency, process automation, and data integration are already available to transform new work processes. Industry experts believe that hyper-automation occurs in the majority of financial services companies. Yet many are unable to reap the benefits, due to disjointed, siled and expensive systems.

Handle higher loan volumes by breaking down processes

To leverage the benefits of automation, lenders like Nucleus Capital‘s 7a Financing are looking at the tasks their teams do every day to identify and streamline time-consuming manual tasks. By using technology to compress the cycle of loan applications and approvals and execute parts of the process simultaneously, 7a Funding has been able to dramatically increase the number of loans processed per person. The organization has also reduced the time it takes to close applications and improved the experience for banks and lenders, making them more likely to choose to work with them in the future.

Tony Brevard, director and CEO of Atlanta-based Nucleus Capital, says, “I’ve learned that automation isn’t just for big banks or tech startups. Our business was growing so fast that we just couldn’t handle the volume. We were looking for automation to solve a particular part of our business workflow – document collection – and were able to nine-fold the volume of business we handle. “

Brevard shared his story and how he was able to speed up his business using automated document collection in a video available at this link.

Critical success factors

While many lenders have invested in digitization, industry analysts say most are early in their journey. Learning from early adopters can help lenders avoid mistakes and speed up their own initiatives. Critical success factors include:

  1. Focus on areas critical to execution, such as the ability to meet increased demand, to have greater impact. The immediate cost savings are significant, but in times of high demand, being able to increase revenues or profit margins will have lasting effects.
  2. Select tools that won’t weigh on people to learn or IT to implement. Configuration, onboarding and continued customer success along with intuitive interfaces will increase utilization and accelerate return on investment.
  3. Look for tools that integrate and extend existing systems to orchestrate improvements in multiple functions. Integration is essential. Data and process silos contribute to the complexity of the business. Investing in applications and services that provide packaged integration process capabilities, open APIs, and can support integration with professional services will lighten the IT load and speed up time to implementation.
  4. Prioritize initiatives that help you gain visibility into your deal pipeline. In times of uncertainty and low volume, it’s crucial to see what stage each trade is at.
  5. Automation is inevitable, but doing it wrong can set you back. SaaS solutions are constantly adding new features, better security, and more flexible deployment options. On the other hand, configuring legacy systems can cost more to run, take longer to deploy, and are often more difficult to change when new information or business priorities emerge.

Rapid innovation to meet business requirements

As the needs of lenders evolve, they have the opportunity to create a business advantage in the tools and processes they choose to digitize and automate. Being able to innovate quickly and adapt to changing consumer demands means assembling capabilities that quickly achieve business goals: revenue, efficiency and effectiveness. To do this, lenders should consider standardizing, simplifying, and automating repetitive processes such as collecting documents for loan applications that free up employee time to focus on more strategic parts of the business.

Learn more about automated document collection here.

Are you looking to refinance? It might pay off to start with your current lender https://const-japan.com/are-you-looking-to-refinance-it-might-pay-off-to-start-with-your-current-lender/ Tue, 09 Mar 2021 10:57:02 +0000 https://const-japan.com/are-you-looking-to-refinance-it-might-pay-off-to-start-with-your-current-lender/ Mortgage refinancing rates today are still near record lows. If you have a good credit rating, low debt level, and a stable job, you might be a good candidate for a new home loan. And if you can significantly reduce the interest rate on your mortgage with this new loan, you could significantly reduce your […]]]>

Mortgage refinancing rates today are still near record lows. If you have a good credit rating, low debt level, and a stable job, you might be a good candidate for a new home loan. And if you can significantly reduce the interest rate on your mortgage with this new loan, you could significantly reduce your monthly payments.

Now, you’ll often hear that when it comes to refinancing, it’s best to research the offers of different refinance lenders – and that’s good advice. You never know when a lender might offer you a better deal. But while seeking a refinance quote makes sense, you should always begin your search with your current lender.

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Use an existing relationship to your advantage

There is one key benefit to applying for mortgage refinancing with your current lender: you already have a relationship. If your account is in good standing – that is, you’ve always paid your mortgage on time and aren’t behind on any payments – your current lender will likely want to keep you as a borrower. As such, your existing lender may be more willing to offer you a competitive interest rate on a new home loan, low closing costs, or both.

Of course, it’s always worth shopping around, even if your lender comes back with a good offer. But by talking to your lender first, you’ll get an idea of ​​what terms you might qualify for. And it might help define your expectations.

Also, if you get a more competitive offer from another lender, your lender may be willing to match it. For example, let’s say your lender comes back to you with an interest rate of 2.9% on your refinance, but another lender offers 2.85%. If you make this second offer to your current lender, they may agree to go down to 2.85%. And the same goes for closing costs – your current lender may be more willing to negotiate them or remain competitive with another offer.

Finally, if you are unsure whether you will qualify for mortgage refinance in the first place, your current lender is a good place to start. If your current lender turns you down for a new loan, you might have a similar experience with lenders who don’t know you. And that might inspire you to work on becoming a better candidate for refinancing. You may need to increase your credit score, pay off some existing debt, or work to increase your income.

Remember that shopping around for a refinance offer is always a smart bet. And if you do your rate purchases within the same 14 day period, it shouldn’t affect your credit score too much. Normally, every refinance request you submit will result in a thorough investigation of your credit report, and too many of these could hurt your score. But multiple refinancing requests within the same two weeks will count as one serious request. As such, you can shop around and get all the information you need to make a smart decision, even if you ultimately stick with your existing lender.

Why real estate investors should consider a comprehensive mortgage https://const-japan.com/why-real-estate-investors-should-consider-a-comprehensive-mortgage/ Tue, 09 Mar 2021 10:56:57 +0000 https://const-japan.com/why-real-estate-investors-should-consider-a-comprehensive-mortgage/ A mortgage for residential owners New to the term “global mortgage”? Do not worry. Many professionals in the financial sector have never been close to one. And they know a little more about them than you do. But if you invest in real estate – perhaps as a homeowner – you might find a comprehensive […]]]>

A mortgage for residential owners

New to the term “global mortgage”? Do not worry. Many professionals in the financial sector have never been close to one. And they know a little more about them than you do.

But if you invest in real estate – perhaps as a homeowner – you might find a comprehensive mortgage (aka “global loan”) very useful for your business. Here’s what you need to know.

Check out today’s mortgage rates. Start here (July 4, 2021)

In this article (Skip to …)

What is a comprehensive mortgage?

A comprehensive mortgage is a type of loan that finances multiple assets at once.

Businesses often use global loans to purchase commercial real estate investments. But this type of loan can also be useful for:

  • Business owners
  • Residential owners
  • Real estate developers or pinball machines
  • Construction companies

A key feature of comprehensive mortgages is the absence of a “payable on sale” clause. This means that the global loan will survive the sale of one or more of the rental properties by which it is secured.

The owner must repay (“withdraw”) the portion of the mortgage that the property sold. But they don’t have to refinance the entire loan.

Indeed, you may be able to negotiate a mortgage that will allow you to sell, buy or replace the properties in your real estate portfolio with a minimum of hassle and expense.

Benefits of global loans

Having a “partial release clause” rather than a “due on sale” clause makes general mortgages particularly useful for real estate developers and investors.

As a developer, you can use a global loan to buy plots of land and build houses on them. Then, as you sell each individual property, you only pay off the portion of the mortgage that funded the unit you sold.

This means that you don’t have to manage many individual mortgages or refinance the entire overall mortgage every time you sell real estate.

The same benefit applies to residential owners. You can own 12 rental properties and spread their financing over one or two mortgages.

Here are some of the other benefits that a comprehensive mortgage can offer:

Less paperwork

A global loan means a lot less paperwork. It allows you to apply for multiple mortgages with a single credit approval. This means you won’t have to submit a credit, employment or asset check multiple times.

Plus, instead of making a lot of mortgage payments per month, you’d only make one or two.

And buying and selling units could be possible with only minor adjustments to your existing comprehensive mortgage.

Save on closing costs

But that’s not all. Imagine the savings you would realize on closing costs, both for the initial mortgages and each time you refinance the loan.

Refinancing multiple loans into one comprehensive mortgage could also save you money on monthly payments, which could increase your cash flow. Although your savings depend on the interest rates you are currently paying and the new rate you have available.

More money

Combining all the stocks you have in your portfolio can help you grow your business. Because it could allow you to maximize the amount you receive in one refinancing of collection.

Better yet, you would pay the closing costs on a single withdrawal refi transaction.

Easier to expand your portfolio

Many private real estate investors end up encountering a common hurdle: They are only entitled to a limited number of mortgages at a time. This ceiling can be a real obstacle to expansion.

Of course, there are workarounds. More often than not, owners create separate companies so that each company has a small number of mortgage loans.

But a comprehensive mortgage negates that need because it allows you to own many homes with fewer loans.

Potentially better loan terms

Imagine someone who has 12 traditional mortgages with an average amount of $ 200,000. For every mortgage lender, it’s a homeowner with a loan of $ 200,000. They will hardly stand out from the crowd.

Someone with a global mortgage of $ 2,400,000 owes the same amount. But they can receive VIP treatment.

And they can use their senior status to take advantage of preferential loan terms and negotiate their own personalized deal.

Again, lower borrowing costs can increase your cash flow from your real estate investment properties each month.

Disadvantages of global loans

As with most things in life, with every benefit there is a downside. Here are some drawbacks associated with a comprehensive mortgage.

Not all lenders offer them

One of the main disadvantages of a comprehensive mortgage is that it is not widely available.

It’s easy to find competitive deals on traditional mortgages. But it can be much more difficult to find a good deal on a comprehensive mortgage.

For starters, many lenders don’t offer them. So you have to find the ones that do. Check with banks that offer business loans for beginners.

You should explore your options with portfolio lenders (who generally view mortgages as their own long-term investments) as well as with traditional and commercial banks.

More difficult to qualify for the loan

You should also expect a closer look at yourself, your financial portfolio, and your business plans when you apply for a global loan. After all, the mortgage lender puts a lot of their money on the line.

Compared to qualifying for a single mortgage, you will need a higher credit score and a larger down payment.

If you are refinancing multiple mortgages into one global loan, expect to need a lower loan-to-value ratio, which means you should have enough equity in the properties you plan to refinance.

Appraisal fees, title searches and other closing costs could also be higher than a single mortgage.

Refusals are frequent. But don’t be discouraged. Seasoned homeowners sometimes expect to be turned down and are happy to keep looking for the perfect lender.

Shorter terms, but not always

It may be possible to find a global loan with a term of 30 years. But it’s not easy. You are more likely to end up with one that lasts 10 or 15 years.

However, don’t immediately move on if those short-term amortization schedules are too steep for you. Sometimes you can negotiate a final lump sum payment that keeps your monthly payments affordable. Just make sure you refinance or sell on time!

No more risk accumulated in one loan

A comprehensive mortgage puts all your eggs in one basket. It is much riskier than a traditional home loan.

If your business is in trouble, you won’t default on one or two small mortgages. You could face foreclosure of all rental units from your comprehensive mortgage at the same time.

Some homeowners have multiple global loans, thus spreading this risk. But it only works if you have a large wallet. The larger these mortgages, the greater the benefits they tend to offer.

Other information on global loans

Each comprehensive mortgage tends to be tailor-made. So the quality of the deal you get will depend on the strength of your finances and business plan, as well as your negotiating skills.

General mortgage loans are generally not available for loan amounts less than $ 100,000 or greater than $ 50 million.

Depending on your financial health and that of your business, you will generally agree with a loan-to-value ratio (LTV) of 50-75%. For purchase loans, that means you will need a 25-50% down payment.

You’ll also need significant cash reserves to qualify, usually enough to cover six months of mortgage payments.

Interest rates vary wildly based on these same financial considerations.

The strongest borrowers with the best credit scores can approach current mortgage rates for a global loan. But the less creditworthy who qualify might pay 10% or more.

So what’s the verdict on comprehensive mortgages?

Obviously, general mortgages will only benefit a minority of homeowners. Most will likely be better off with their existing funding.

But some might find the benefits of a global loan very valuable. If you have a large portfolio, a strong business, and a lot of entrepreneurial spirit, this type of loan might be worth exploring further.

What are the mortgage rates today for homeowners?

Mortgage rates today are near their historic lows. Of course, general loan rates can be much higher than standard mortgage rates. But if you have great credit, lots of cash, and you’re willing to shop, you might find a good deal.

Check your new rate (Jul 4, 2021)

This week in history: loans granted to ALMCO – Albert Lea Tribune https://const-japan.com/this-week-in-history-loans-granted-to-almco-albert-lea-tribune/ Tue, 09 Mar 2021 10:56:57 +0000 https://const-japan.com/this-week-in-history-loans-granted-to-almco-albert-lea-tribune/ Local June 11, 1990: The Albert Lea Port Authority unanimously voted for a loan of $ 100,000 to ALMCO Inc. and the board of directors of Albert Lea Industrial Developmental Corp. voted to match the Port Authority loan. ALMCO used the funds to purchase another line of products. June 12, 1970: A Stop N ‘Go […]]]>


June 11, 1990: The Albert Lea Port Authority unanimously voted for a loan of $ 100,000 to ALMCO Inc. and the board of directors of Albert Lea Industrial Developmental Corp. voted to match the Port Authority loan. ALMCO used the funds to purchase another line of products.

June 12, 1970: A Stop N ‘Go grocery store opens on East Main Street and Garfield Avenue. It was the 10th Stop N ‘Go in southern Minnesota.


2001: Timothy McVeigh, 33, was executed by injection at the federal prison in Terre Haute, Indiana, for the 1995 Oklahoma City bombing that killed 168.

June 12, 1994: Nicole Brown Simpson and Ronald Goldman are massacred to death outside her Los Angeles home. (OJ Simpson was later acquitted of the murders in a criminal trial, but was ultimately found responsible in a civil action.)

1972: During the Vietnam War, an Associated Press photographer took a photo of a screaming 9-year-old girl, Phan Thi Kim Phuc (fahn thee kihm fook), as she ran naked and badly burnt from the scene of a South Vietnamese napalm. attack.

1968: Authorities announce the capture in London of James Earl Ray, the alleged assassin of civil rights leader Dr Martin Luther King Jr.

1963: President John F. Kennedy enacted the Equal Pay Act 1963, aimed at eliminating pay disparities based on gender.

1954: During Army-McCarthy Senate hearings, Army Special Advocate Joseph N. Welch berated Senator Joseph R. McCarthy, R-Wis., Asking, “Do you have no sense of decency, sir?” Finally, have you left no sense of decency? “

June 11, 1776: The Continental Congress formed a committee to draft a declaration of independence calling for the liberation of Great Britain.

1692: The first execution resulting from the Salem, Massachusetts witch trials took place during the hanging of Bridget Bishop.

Waunakee Village Board Evaluates Guidelines for Affordable Housing Funding | Business https://const-japan.com/waunakee-village-board-evaluates-guidelines-for-affordable-housing-funding-business/ Tue, 09 Mar 2021 10:56:57 +0000 https://const-japan.com/waunakee-village-board-evaluates-guidelines-for-affordable-housing-funding-business/ The proposed workforce housing project at 701-705 W. Main St. helped spark more discussion about the use of extensions of tax incremental financing (TIF) to finance such housing and improve the existing housing stock in Waunakee. Although the village council has yet to take a formal vote on Cohen-Esrey’s proposal, members voted in favor of […]]]>

The proposed workforce housing project at 701-705 W. Main St. helped spark more discussion about the use of extensions of tax incremental financing (TIF) to finance such housing and improve the existing housing stock in Waunakee.

Although the village council has yet to take a formal vote on Cohen-Esrey’s proposal, members voted in favor of a resolution allowing the use of affordable housing extensions at their meeting on the 1st. February.

Projections show that over the next 10 years, the closure of three additional TIF districts is planned, allowing the village council to use a significant amount of tax increase for what staff have proposed to establish in as Waunakee Housing Improvement Program (WHSP).

Waunakee chief financial officer Renee Meinholz called the estimates rough, noting that they were based on projections for 2020, but shared with the board at its February 15 meeting a scenario of the dates of closure of all TIF districts in Waunakee. Using the 2020 projections, it shows the amount of the tax increase that could be allocated to the WHSP:

When the board passed a resolution to extend TID 2 at its February 1 meeting, board members asked staff to research how other communities are using TIF in this way. Some have expressed the wish that a policy be in place before deciding on the Cohen-Esrey proposal.

Wisconsin law included the extension of affordable housing to its TIF law in 2009, so it’s relatively new to many communities.

“At this point, very few communities have landed any funding from this program,” Schmidt said.

The trend has been to use the funds for single-family or duplex properties with basic improvements to improve the housing stock, he added. One example is the town of Menasha, where Strong Neighborhoods programs help citizens invest in their homes.

In Fitchburg, the city plans to close two TIF neighborhoods over the next two years, according to Schmidt’s memo to the board. This city plans to add $ 6 million to its Affordable Housing Fund. Fitchburg is also using part of its Affordable Housing Fund to develop a housing plan with the help of a consultant.

Schmidt suggested that the council look to the Waunakee Community Development Authority to suggest other policy programs other than improving the existing housing stock.

But he said he had found no other example of guidelines for using affordable housing extension funds for projects like that of Cohen Esrey, who received low housing tax credits. income (LIHTC) through the Wisconsin Housing and Economic Development Authority.

“As far as something perfect, take in this case a LIHTC product, and its limitations and constraints, and then put some kind of metrics and metrics to provide a reward, that information just wasn’t there,” Schmidt said.

Draft parameters of the housing policy and fund

Schmidt suggested that the village establish a housing improvement program in Waunakee that would offer 50% forgivable loans for the projects.

Nicole Solheim, executive director of the Wisconsin Partnership for Housing Development, explained the benefits of forgivable loans. Solheim consulted with the Waunakee Community Development Authority as they work on the recommendations of the Village Housing Task Force.

In large cities, Solheim said, the grants are structured as loan programs so that communities can see some of the funds for affordable housing projects go back to their housing fund. Loans also have different tax implications than grants.

“A lot of them are loans, both from a tax point of view and from a transaction structure, and also again, wanting to be able to fund future projects,” Solheim explained.

Schmidt presented parameters to guide a Waunakee housing improvement program with five points.

One identifies qualifying proposals as “qualified income units affordable to 100% or less of the median income of the HUD area, where” affordable “means no more than 30% of a household’s income. “

Another limits the loan to a maximum of 10% of the acquisition and construction costs.

A single project should not use more than 80 percent of the housing fund balance.

Half of the loan will be canceled 15 years after the completion of the project, the remaining 50% being repaid at a time to be negotiated between the village and the beneficiary and no later than 30 years after the completion of the project.

The project must demonstrate financial need.

Board members expressed support for the loan program and the award criteria.

“I love that we are pioneers,” said administrator Kristin Runge of the village’s use of the relatively new use of TIF. A community development specialist at UW Extension, Runge helped lead the village housing task force. She is working with other communities on housing projects in the Dane County area, she said.

“I said I think Waunakee is going to come up with something pretty innovative about how they use the TIF extension,” she told the board.

Runge supported the idea of ​​a revolving credit fund.

“We’re not just using that extra year that we earn from TIF or TID to fund a project, but we’re really making a long-term investment that we can use over the course of our lives as a community,” he said. she declared.

Administrator Nila Frye noted that 20-year TIF districts are being created for businesses. She encouraged the board to be flexible when considering different housing projects and their ability to repay 50% of the loan over a 15-year period.

Administrator Bill Ranum suggested a bidding process for the funds.

In Madison, an annual request for development proposals allows city council to set priorities, Solheim said.

Administrator Gary Herzberg said the draft policy will facilitate the decision-making process of the village council and the Community Development Authority. Herzberg pointed out that each of the TIF districts closes before their statutory deadline, allowing them to provide a benefit to taxpayers through an extension.

“This is how we sold all these TIFs. I don’t want the public to start thinking, ‘We’re going to do this on every TIF because then we’ll have this pool of affordable housing’ and forget about why all of these TIFs were approved in the first place, ”Herzberg said. .

Herzberg noted that several residents oppose the use of the TIF and view the economic development tool as unfavorable to taxpayers while benefiting business owners.

“And now we’re just going to extend them for another year,” Herzberg said.

Administrator Phil Willems also supported the forgivable loan program and said the criteria could be fine-tuned.

Village president Chris Zellner said he wanted the housing improvement project to be streamlined and questioned the process.

He asked if the village council was rushing policy because of the Cohen-Esrey project.

“For me, I don’t like it when we are rushing,” Zellner said. But he added that the process for receiving tax credits for low-income housing is rigorous and difficult.

Zellner said he didn’t want Cohen Esrey to miss the opportunity, adding that it would also be lost to Waunakee.

The Community Development Authority will likely discuss the creation of a housing improvement program in Waunakee, as well as the criteria for a 50% forgivable loan program at the next meeting.

The general moratorium on loans is not necessary if the foreclosure https://const-japan.com/the-general-moratorium-on-loans-is-not-necessary-if-the-foreclosure/ Tue, 09 Mar 2021 10:56:57 +0000 https://const-japan.com/the-general-moratorium-on-loans-is-not-necessary-if-the-foreclosure/ With vaccine delivery on the horizon, analysts believe current targeted loan assistance will remain in place by ASILA JALIL ANALYSTS believe it is highly unlikely that the government and Bank Negara Malaysia will promote another general loan moratorium, although talks of a new form of foreclosure could be instituted across the country this week due […]]]>

With vaccine delivery on the horizon, analysts believe current targeted loan assistance will remain in place


ANALYSTS believe it is highly unlikely that the government and Bank Negara Malaysia will promote another general loan moratorium, although talks of a new form of foreclosure could be instituted across the country this week due to the increase in Covid-19 cases.

With vaccine delivery on the horizon, analysts believe the current targeted loan assistance will remain in place to meet different clients with different needs. Read more here: https://www.paydaychampion.com/

MIDF Research chief research officer Imran Yassin Mohd Yusof said the government was better prepared to deal with the situation than when the pandemic first broke out in the country, resulting in restrictions on nationwide movement.

“At the start of the pandemic and the movement control order (MCO) in March 2020, there was a lot of uncertainty, especially if we will be able to get the vaccine.

“Now, however, it is clear that we will get the vaccines, therefore the situation is not as precarious as it used to be. In addition, the government and regulators are more experienced than before in dealing with the pandemic.” , did he declare. Malaysian Reserve (TMR) recently.

Although banks have the balance sheets to absorb another general loan moratorium, Imran Yassin said the move could lead to lower profits, however, which could lead to a credit crunch.

He has a positive view of the outlook for the banking sector due to the expected economic recovery.

“We expect provisions to be lower this year which should help earnings. Lending growth could accelerate alongside the economic recovery, ”he added.

The number of positive cases in the country over the past month did not drop below 1,000 and hit a record high last Thursday with 3,027 people infected.

This has led to rumors of another possible lockdown in the country, or in some states, to curb the spread of the virus, which will impact the recovery from the OLS crisis last March.

According to government officials, the first batch of Pfizer Inc vaccine doses are expected to arrive in Malaysia by February and the amount will be able to cover 20% of the country’s population.

Dr Mohd Afzanizam Abdul Rashid, chief economist of Bank Islam Malaysia Bhd, shares the same point of view as Imran Yassin, adding that there can be no “one size fits all” solution to the issue of loans .

“We learned a good lesson from the loan moratorium last year. There are people who may want to continue paying their financing commitment and there are also borrowers who are in urgent need of help.

“It needs to be targeted, tailored and well suited to each borrower,” he said. VMR.

When asked if there would be a downgrade in the industry, he said the central bank has been vigilant in monitoring the financial condition of institutions on the basis of their active engagement.

He added that banks have their own internal targets, which are usually higher than what is prescribed as a minimum level, whether in terms of capitalization, liquidity or asset quality.

“In that sense, I think the chances of downgrading would probably be quite remote and maybe it’s a unique assessment for each country or region,” he said.

Meanwhile, a general loan moratorium is also not a necessity, as a small segment of borrowers may need some form of assistance.

Another industry expert said VMR these data show that 85% of borrowers resumed their repayments after the end of the moratorium in september.

“The current targeted approach could be fine-tuned perhaps, but should suffice.

“Banks can provide more aid in a targeted manner over a longer period, perhaps vary the repayment terms and leave room for maneuver in certain sectors,” he said.

Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said on Saturday that the government would not impose a national MCO, but instead put in place more stringent standard operating procedures following the increase in Covid cases. 19 in the country.

LIVE updates from Manchester Arena bombing public inquiry as Chief of Police continues to testify https://const-japan.com/live-updates-from-manchester-arena-bombing-public-inquiry-as-chief-of-police-continues-to-testify/ Tue, 09 Mar 2021 10:56:57 +0000 https://const-japan.com/live-updates-from-manchester-arena-bombing-public-inquiry-as-chief-of-police-continues-to-testify/ Details of family history given to the survey A photo of Abedi taken on April 15 as he traveled from the UK to Libya via Manchester Airport is shown. The cell phone numbers linked to it were also quickly discovered. One was in contact with convicted terrorist Abdalraouf Abdallah, according to the investigation, and with […]]]>

Details of family history given to the survey

A photo of Abedi taken on April 15 as he traveled from the UK to Libya via Manchester Airport is shown.

The cell phone numbers linked to it were also quickly discovered.

One was in contact with convicted terrorist Abdalraouf Abdallah, according to the investigation, and with a man who was charged with a terrorist offense and subsequently cleared.

Rabaa Abedi, the brothers’ aunt, made a statement, according to the investigation.

She lives in Canada.

Her brother, Ramadan, the father of the brothers, joined the Libyan police and married Samia in Tripoli in December 1990.

They fled Libya and traveled to the UK via Saudi Arabia.

Ramadan arrived in the UK in July 1993 and applied for asylum five days later.

He was initially refused, the inquiry says, but after appeals he was granted refugee status in 1997.

Samia was granted the same status at the time due to their marriage.

Ramadan was granted unlimited leave to stay in the UK in 2002, but refused UK citizenship.

In 1993 he was shown to be residing in Manchester.

The investigation learns that he was “naturalized” in May 2007 following a second application for citizenship.

Ismail Abedi, the older brother, was arrested and questioned on May 23, according to the investigation.

He said he had “asked his parents for help” for his siblings, says DCS Barraclough, and that they had dropped out of school.

Hashem, Ismail said, had started using drugs and Ismail told police he believed his siblings were involved in fraud, according to the investigation.

Abdurrahman Forjani, a cousin of the brothers, was also interviewed, DCS Barraclough said.

The Abedi family, he told police, were deeply religious.