South Western United States Hotel Loan

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But what we did have was a hotel that was in first class condition with excellent cash flow. Oh, I forgot to mention he was in default on his mortgage for not paying his property taxes and the current bank was telling the owner they were going sell his hotel at auction soon. So, our evaluation told us that while it would be rather a tight deal at 14% on a 12 month note, we were charging 4 points. The tax returns and the bank statements looked like the hotel could support the note. We ordered the appraisal, scheduled the site visit and we were off and running! Groupe 369 Corp. issued our Letter of Intent and the client put up a $28,000 deposit. When we got the title, I was rather concerned about the number of problems on title. Actually, this can be a typical situation with many of our customers. The problem is solving these title issues in a short period of time. We can't close a loan if a contractor with a $1500 lien is in a title position before us. We have to be in first position. Needless to say we dug in to try and solve all of the problems. Actually, this is one of the most frustrating things to deal with; everyone we ...
... call on behalf of our client was screaming at us about things with which we were not involved. We try to maintain a calm demeanor, but often have to raise our voice: "Mr. X, I am merely trying to get you paid! What are you willing to settle for if you get your money in 30 days?" Often they say, "I don't know I will have to call you back." I remember a couple of these contractors we reached on their cell phones and we followed up a couple days later to find out the phones had been disconnected! (I promise not to use any four letter words as this is a family-friendly organization. Use your imagination!) To add to our frustration, we had numerous problems reaching the client during the underwriting process. We needed simple things like missing bank statements to justify the income and compare them to the tax returns, insurance statements, etc. Extracting these documents was like pulling teeth! After 45 days of this run-around, we started getting panic phone calls from our client. It seems the bank had been calling him and informing him that if there was anything left out of the proceeds after the auction he might receive some of it. Meanwhile they informed him they were going to court to get a lock box put on the hotel. He was hysterical. Finally, he began cooperating.

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