Q2 New Product Enhancements Spotlight
Specialized Loan Sale and Partial Assignment Provisions
We’ve introduced specialized provisions for loan sales and partial assignments, perfect for lenders managing portfolio loans. This update simplifies the process of selling loans into securitization pools, to related or third-party investors, or to lenders holding portfolio loans, offering you greater flexibility and efficiency in managing your loan portfolios.
Depository Account Adherence
We’ve expanded options to customize terms, conditions, and remedies related to financial covenants tied to a loan party’s adherence to depository account requirements. This update offers greater flexibility and stronger safeguards, ensuring compliance and mitigating risks in your lending operations.
Financial Reporting Provisions Expansion
We’ve expanded our dynamic financial reporting provisions, allowing lenders to customize standard requirements and tailor them on a loan-by-loan basis for more complex transactions. This enhancement gives you greater control and precision in financial reporting.
Q2 Compliance Update Spotlight
Tracking State Legislatures Bills
Currently, we are tracking 36 bills in State Legislatures that may require adjustments to certain loan documents if passed into law. Updates will be provided as these bills are enacted and set to go into effect.
Spousal Consent and Execution of Various Loan Materials
Expanded options for lenders making loans to individual borrowers now address state-specific compliance requirements for spousal consent and execution of various loan materials.
Upcoming Product Enhancements
Single Sign-on
Enhancement that allows seamless access to the GoDocs platform using integrations with Third Party Identity Providers and Automated User Provisioning.
Integrated Order Process
Functionality to embed the document order process directly in your LOS, creating a fully integrated experience.
Streamlined Validations
Updates to order validation to streamline workflows and improve user experience.
Admin Interface for Terms & Conditions
New feature to allow Client admins to manage acknowledging assigned Terms and Conditions, Compliance, and Order Acknowledgements at the customer level.
Trending Industry News
What's Changed in CRE Sales Trends
Prices per square foot, cap rates, and occupancies were some of the top trends during May 2024.
Crexi’s National Commercial Real Estate Report for May saw some overall positive changes for property owners. At the top, they saw the asking price per square foot climb by 3.76% across the marketplace, accompanied by a cap rate compression from 6.82% to 6.6%.
Q1 2024 Private Lender Report
Top lenders, market commentary from active lenders, metros with largest changes in activity, borrower loyalty, and more. Private lending origination volume was down 4.5%+ in Q1 2024 compared to Q4 2023; compared year-over-year to Q1 2023, origination volume was up 2.5%; since reaching a low in January 2023, activity held flat to slightly positive.
GoDocs News
Case Study: First Mid Bank Fast-Tracks New Market Entry in Commercial Lending
The Drive for Rapid Expansion
First Mid targeted the Greater Dallas-Fort Worth market for rapid expansion, to capitalize on its commercial lending potential. They faced challenges due to limited operational expertise in Texas and concerns about meeting state-specific legal requirements for loan documentation…
15 in 15: 15 Mortgages in a Single Loan in Just 15 Minutes
A major Lender in California was working with a loan that involved a portfolio bridge loan which, consisted of 15 mortgages. All mortgages in this package would be cross-defaulted and cross-collateralized. This approach would ensure that the Lender was properly protected…
Did You Know?
Did you know GoDocs has a FAQ/Knowledge Base?
GoDocs has an extensive FAQ/Knowledge Base to help you handle specific situations within our software. This comprehensive library of articles and resources provides quick answers, best practices, and clear explanations. With easy accessibility, this ensures you can find the information you need anytime, keeping your workflow efficient. With easy search functionality and continuous updates, our Knowledge Base is a valuable resource for all your commercial loan documentation needs. For more complex issues, our dedicated support team is always available to assist you.
Did you know GoDocs has automated business purpose documentation for multifamily loans?
GoDocs automates business purpose documentation for multifamily loans, streamlining the process while ensuring compliance. Our software includes flexible options like separate Business Purpose Loan Certification and Non-Owner Occupancy Certification. This helps meet unique business needs, clearly communicates the loan’s commercial intent, and maintains regulatory adherence. These features are critical for lenders to efficiently manage complex transactions, reduce risk, and ensure regulatory compliance, providing you with the confidence to navigate multifamily loan closings effectively.
Did you know GoDocs has automated Depository Requirements?
Depository account covenants, crucial for trust and transparency, are effortlessly generated in the GoDocs closing platform, saving time and reducing errors. With automated Depository Requirements, lenders benefit from improved efficiency, customizable options, better risk management, and the ability to build stronger relationships with borrowers. Borrowers gain transparency, flexibility, and faster loan processing, making the loan documentation process smoother and more efficient.
GoDocs Leadership Insights
Office Conversions: A Leader in Construction/Rehab Lending
With interest in commercial property tenancies lower than pre-pandemic times, commercial properties are sitting vacant across the country, including major cities. Property owners and developers are converting high-rise properties from offices to multifamily residences or mixed-use properties to address their current debt service challenges.
According to recent CBRE research, the completion rate of office conversion projects is expected to more than double compared to last year.
Loan documentation for a major construction or rehabilitation project like an office conversion needs to consider all the moving parts, such as new contractor, architect, and engineer plans; new municipal approvals; and financing of direct and indirect construction costs.
At GoDocs, our construction loan products can facilitate such projects. Our cloud-based platform enables lenders to efficiently and accurately document these loans, reducing the time to close. By using GoDocs, lenders can enter this burgeoning market in a cost-conscious manner.
What Does the In re Moon Decision Mean For You?
On April 16, 2024, the Ninth Circuit Court of Appeals issued a significant decision for commercial lenders. The Court affirmed the Bankruptcy Appellate Panel’s decision in the case of In re Moon, which held that Milestone Financial, LLC’s settlement agreement with the borrower, reducing the loan’s interest rate from 11.30% to 11.05%, violated California usury laws. Milestone argued that the settlement agreement should be exempt from usury laws because the initial loan was made or arranged by a licensed real estate broker. The Court disagreed, concluding that the settlement agreement, being a forbearance agreement, was not made or arranged by a licensed real estate broker and thus not exempt from California’s usury laws.
What This Means for You
- State Usury Exceptions: Lenders must be aware of state usury exceptions to avoid exceeding usury limits. Milestone’s initial loan interest rate of 11.3% qualified for the “broker” exception to California’s usury limit of 10%, but the subsequent settlement agreement did not.
- Involvement of Licensed Brokers: In California, when negotiating a settlement agreement, forbearance agreement, or loan modification, a licensed broker should be involved. An unlicensed lender negotiating these agreements risks the agreement being deemed usurious.
- Consistent Broker Involvement: Involving the same licensed broker who negotiated the original loan will strengthen the argument that the subsequent agreement is not usurious.
- Ensuring Compliance: The best practice is to ensure that your California modification/forbearance agreement involves a licensed broker, especially if the original loan was in connection with a sale, lease, or other transaction for compensation. Alternatively, ensure that the charged interest rate is at or below the state’s usury limits.
With our 50-state real-time compliance automation built into our closing platform, you can ensure your loan documents are accurate and meet state-specific legal requirements. GoDocs simplifies compliance by providing automation and tooltips to guide our customers through the loan closing process. This commitment to comprehensive compliance is further highlighted by the In re Moon decision, demonstrating how we equip our customers with the knowledge needed to make important business decisions and the flexibility needed to tailor their loan documents to the seismic changes that result from such legislative decisions.
Q2 Additional Product Enhancements
- Expanded capacity to create custom repayment provisions for periodic and specialty repayment arrangements using GoDocs standard support.
- Update to Trustee Certification for South Carolina deals.
- Simplified tracking within GoDocs for digitally signed documents from the initial delivery of electronic copies to all parties through their execution and retrieval of all signed documents for storage on the GoDocs system.
- Expanded deal term and financial covenant options for standard support creation of unsecured loans within the C&I loan product platform.
- Added ability for lenders to choose among increased options for ALTA title insurance coverage within automated closing instructions.
Q2 All Compliance Updates
All States
CRE
- Expand Brokerage Disclosure and Indemnity Provisions in the Loan Agreement
- Expand ALTA title policy options to include in Closing Instructions
- Expand options for inclusion of spousal signatures and/or spousal consent forms in community property and spousal consent states
State Specific
CRE
- South Carolina
- Option, with a new tool tip, to enable a recordable form of Certificate of Trust
- California
- Option to include notice and related municipal code provisions for retrofit projects in LA County
- Florida
- New tool tip for Balloon Payment Amount options
- New tool tip for use of Florida Affidavit for Individuals/an Entity with Foreign Interests
- Georgia
- Update to the Georgia Deed to Secure Debt and Recordable Amendment Cover Sheets to include the “Prepared By,” and “After Return To” header
- Iowa
- Expand lender protections for disclosure of maximum credit secured by mortgage
- Maryland
- CRE + C&I Compliance: Update Confession of Judgment language for promissory note and guaranty
- New Mexico
- New tool tip for UCC Warnings when collateral is located in NM only, or in NM and one or more other jurisdictions
- New York
- Expand UCC-1 and UCC-3 forms to adopt new format requirements
- Multi-State
- New tool tip regarding usury limitations for loans make in AR, FL, MA, MI, MT, NC, NJ, NY, RI, and TX
Modifications
- California
- Expand lender protections in loan modifications to obtain present and future waiver of claims
- California