MBA’s Small Balance Lending Summit to Focus on Opportunities, Challenges

EDR is excited to be participating in the MBA’s inaugural Small Balance Lending Summit in Chicago next week. The Summit will prove to be timely and informative to community banks and mortgage lenders looking to get into the game as economic conditions steadily improve post-recession.

In addition to improving economic conditions, the commercial small balance loan (SBL) market is attractive in part because of an increased desire from investors for small balance commercial real estate, rising residential mortgage interest rates, and an increasing number of SBL refinance opportunities on the horizon with terms or payoffs coming due.

With the biggest opportunity and need in the multi-family sector, the SBL sector has caught the attention of Freddie Mac and Fannie Mae, and their loan programs will play a big role in the 2016-17 SBL market.

The MBA’s Summit will feature sessions and speakers that include the GSE’s, HUD, investors, mortgage banking, community banks, and others. It will focus on providing lenders interested in entering the market information needed to assess opportunities and challenges. Those already involved in SBL will gain valuable insight for their particular challenges, including operational issues, technology solutions and financing strategies.

Cost of origination is one of challenges. According to Ivan Kaufman, CEO and president of Arbor Commercial Mortgage, “what we’ve focused on is not only the process but getting the transaction costs down. Given the nature of a small balance loan, when your application fees and legal fees and appraisal fees are high as a percentage of the loan amount, it could really make it extremely expensive,” Kaufman said in a National Mortgage News article.

EDR’s Jamie Haberlen will be a panelist on a session focused on meeting some of the challenges related to cost of origination. The session, Meeting Operational and Technology Challenges of SBL, will kick off at 11:00 a.m. on Thursday, June 23. EDR’s Collateral360 can help lower the cost of originating small balance loans while providing tools to help manage the various risks associated with collateral.

The MBA SBL conference runs June 22-23 at the Loews Chicago O’Hare Hotel. Go here for more information.