Category: Private Lending

Last time I mentioned that after I switched jobs to the nearest bank from home, I started reading through the source files, studied the business sections and numbers to figure out how they make money. So, what did I discover?Before that, a little gossip had helped me a lot. I had just joined, and the management was constantly praising the bank’s stock performance, mentioning the shareholding structure. The bank was founded by a retiring lawyer many years ago, and after going public, there were still many shares, all of which would go to the founder’s only daughter in the future.... Continue reading

Continuing from the last post, I researched several core business departments, but I didn’t know which ones were the most crucial. I tried my best to rank them in order of importance, then listed out each department and the people I had interacted with. After filtering based on my existing relationships, I decided to first approach an underwriter who I was quite familiar with and easy to talk to. I thought I might need to approach 5-6 people to get all my questions answered, but as it turned out, she was the right person from the get-go.Her name is Jen.... Continue reading

Continuing from the last post, Jen was amazing. For several days straight, she patiently taught me how to underwrite the deals, page by page, line by line. The processmainly consists of three parts: the borrower, the property itself, and the numbers. We discussed each part in detail.Firstly, the borrower.When it comes to borrowers, we mainly examine the loan application materials and credit reports. Firstly, we need to verify various IDs to prevent fraud. At the same time, we need to ensure that the personal details and IDs on the credit report match. In this line of work, incidents of ID fraud... Continue reading

Continuing from the last post, after reviewing the borrower, let’s talk about the property itself. Property underwriting mainly involves examining the appraisal report and the property title.– Is the appraisal company licensed and accredited?– There’s a list circulating within the industry known as the “bank approved appraisal company” list. If the appraisal company isn’t on this list, we generally don’t accept it and instead request a report from a designated appraisal company. In major cities, there are only a few top-tier appraisal companies used by banks, making it easy to remember. However, in more remote areas, it’s safer to use... Continue reading