dry?”
“I’m hearing the warning bells, too!” Mark returned. “I’ve had some distressing thoughts based solely on human nature.
“ Think this through with me: If we are expected to make so many more commercial loans with no significant increase in staff, what might stall our progress? Hint: what is a frequent cause of denied loans and delayed closings?”
Denise frowned in frustration as she replied.
“I don’t have a single answer. Our stringent underwriting standards are my most frequent hurdle and property appraisals seem to take way too long. More often than not, they come back too low to fit our equity requirements.”
“Thinking logically is your strong suit, Denise, but I’m trying to think like our senior management .
“ I think their projections are ruled by the vision of a dam of dollars about to break and flow right into their pockets.
“ I fear the ethics of our lending practices are about to take a nosedive into a pool you would not want to enter without waders on. Steve, am I way off?”
“The same image is coming into focus for me, Mark.
“ If we rely less on the borrowers’ ability to pay and more on the value of the purchased property with appraised values showing significant increases , loan denials will decrease.”
“Oh my God, this would be taking a huge risk if the commercial real estate market should collapse. Can’t we stop this? But then, aren’t real estate appraisers strictly regulated?”
“Dear Denise, I would be willing to bet my year-end bonus that we cannot and they are not. On the basis of several hours of research, I confidently state that there will be no dearth of esteemed economists, locally and nationally, predicting that real estate prices and demand will increase throughout the decade.
“ Our bank president is not going to find it difficult to support his premise that all will be well in the marketplace.
“ The money will pour in and he will become one of the nouveau rich. In his supreme benevolence, he is intimating that his loyal workers will also gain if we play the game!
“ Providing evidence to the contrary will only get us labeled as dissidents.”
After a moment’s thought, Steve agreed. “A better use of our time would be to ponder our individual and collective response to Jim’s assignment.”
“I’m with you guys. Although I’m not ready to declare, I’d be willing to share my thoughts at breakfast tomorrow. How about coming to my apartment for an exquisite soufflé? Are we on?”
Having agreed to meet the others again in the morning, Mark meandered back to his office by way of the public library and then visited an associate at J.P. Morgan & Company. A call to his girlfriend, Peggy, put her on alert that he wouldn’t be available for at least the next twenty-four hours as he would be pulling an all-nighter poring over materials, making lists and analyzing his notes.
In the morning, Mark emerged from his apartment bleary-eyed but semi-confident that he could live with his decision. He never considered the possibility of asking Peggy, or anyone else, for input. His research strategy hadn’t failed him yet. He kept at it until he decoded a logical conclusion that felt right. Could he truly say this felt right? Although satisfied with his process he thought predicting the consequences might require the insight of a prophet. Mark wasn’t acquainted with anyone bearing that title.
18
FOUND! A WAY TO JUSTIF Y RISK
The art on the walls of Denise’s apartment was primarily black and white prints of photographs she had taken herself. The living area was furnished in Ikea ‘dorm room’ designs, simple but comfortable with oversized pillows on both loveseats.
Books were plentiful, organized by topic on wooden shelves that lined two walls. Candles of various sizes and fragrances were placed artfully throughout the living space and lit frequently judging by the lingering scents. Mark and Steve
“I’m hearing the warning bells, too!” Mark returned. “I’ve had some distressing thoughts based solely on human nature.
“ Think this through with me: If we are expected to make so many more commercial loans with no significant increase in staff, what might stall our progress? Hint: what is a frequent cause of denied loans and delayed closings?”
Denise frowned in frustration as she replied.
“I don’t have a single answer. Our stringent underwriting standards are my most frequent hurdle and property appraisals seem to take way too long. More often than not, they come back too low to fit our equity requirements.”
“Thinking logically is your strong suit, Denise, but I’m trying to think like our senior management .
“ I think their projections are ruled by the vision of a dam of dollars about to break and flow right into their pockets.
“ I fear the ethics of our lending practices are about to take a nosedive into a pool you would not want to enter without waders on. Steve, am I way off?”
“The same image is coming into focus for me, Mark.
“ If we rely less on the borrowers’ ability to pay and more on the value of the purchased property with appraised values showing significant increases , loan denials will decrease.”
“Oh my God, this would be taking a huge risk if the commercial real estate market should collapse. Can’t we stop this? But then, aren’t real estate appraisers strictly regulated?”
“Dear Denise, I would be willing to bet my year-end bonus that we cannot and they are not. On the basis of several hours of research, I confidently state that there will be no dearth of esteemed economists, locally and nationally, predicting that real estate prices and demand will increase throughout the decade.
“ Our bank president is not going to find it difficult to support his premise that all will be well in the marketplace.
“ The money will pour in and he will become one of the nouveau rich. In his supreme benevolence, he is intimating that his loyal workers will also gain if we play the game!
“ Providing evidence to the contrary will only get us labeled as dissidents.”
After a moment’s thought, Steve agreed. “A better use of our time would be to ponder our individual and collective response to Jim’s assignment.”
“I’m with you guys. Although I’m not ready to declare, I’d be willing to share my thoughts at breakfast tomorrow. How about coming to my apartment for an exquisite soufflé? Are we on?”
Having agreed to meet the others again in the morning, Mark meandered back to his office by way of the public library and then visited an associate at J.P. Morgan & Company. A call to his girlfriend, Peggy, put her on alert that he wouldn’t be available for at least the next twenty-four hours as he would be pulling an all-nighter poring over materials, making lists and analyzing his notes.
In the morning, Mark emerged from his apartment bleary-eyed but semi-confident that he could live with his decision. He never considered the possibility of asking Peggy, or anyone else, for input. His research strategy hadn’t failed him yet. He kept at it until he decoded a logical conclusion that felt right. Could he truly say this felt right? Although satisfied with his process he thought predicting the consequences might require the insight of a prophet. Mark wasn’t acquainted with anyone bearing that title.
18
FOUND! A WAY TO JUSTIF Y RISK
The art on the walls of Denise’s apartment was primarily black and white prints of photographs she had taken herself. The living area was furnished in Ikea ‘dorm room’ designs, simple but comfortable with oversized pillows on both loveseats.
Books were plentiful, organized by topic on wooden shelves that lined two walls. Candles of various sizes and fragrances were placed artfully throughout the living space and lit frequently judging by the lingering scents. Mark and Steve
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