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In 2020, Lenders Try Replacing Long Lunches With Web Crawlers


As the coronavirus pandemic puts a dampener on the ways people used to meet, get to know one another and stay in touch, the relationship-driven lending business has come up with all manner of substitutes for in-person meetings, from drive-by caravans to celebrate existing clients and web-crawling technologies to suss out potential new ones.

Alliant Credit Union Vice President of Commercial Lending and Loan Trading Charles Krawitz said that getting to know a borrower has always been a key component of underwriting and to fill the new gap that prevents getting to know someone in person, the company has turned to internet crawling technologies that seek information related to a borrower, their holdings and their past behaviors.

“Since the pandemic, we have broadened the use of such technologies as a means of learning more about a borrower’s reputation and past dealings,” he told Bisnow. “This has helped to replace revelatory in-person discussions and provides us with insights into a borrower’s character.”

According to Krawitz, Alliant implemented web crawling tech about a year ago, in response to a fraud case. Had it been in place sooner, he said, it could have helped the company uncover the associated deception and prevented a significant loss. But in the past six months, its value has only become clearer.

While workarounds like Zoom have been useful, he said they often leave lenders feeling as if they don’t have a great feel for the borrower."The information garnered on a Zoom call certainly falls short in comparison to what could have been learned during a firsthand tour of a property followed by a drawn-out lunch,” he said.

Chris Forte, a senior director on Walker & Dunlop's multifamily finance team in Bethesda, Maryland, has found in-person meetings tough to replace.

The firm no longer hosts large meetings or does client office visits, the number of people who attend property tours is limited, and lease audits have gone virtual. As he tries to maintain regular and effective communication with his clients in the "new normal" of social distancing, he finds himself relying as much on old-fashioned means of contact, like phone calls, as on technology.

“We’ve done things like drive-by caravans for local clients and Zoom celebrations for those a little further away, but we never underestimate the power of a thank you note sent by mail,” he said.

Ultimately, the goal is to get back to face-to-face dealings.

“I’ve implemented socially distant coffee into my schedule, and people are very receptive,” Forte said. “It’s great to get some personal interaction and it's something I look forward to given our current limited social life.”

Krawitz said he has also needed to find tech that can supplement the underwriting insights he would previously have gleaned from on-site inspections and market visits, ramping up the use of technologies from Moody’s for access to deeper financial research.

Alliant is currently relying on a mix of third-party vendors, including appraisers and environmental engineers, along with a virtual tour of the asset and surrounding area to get a feel for an asset and its positioning in the market, but again, it is only a Band-Aid until it is able to go back to the old ways.  

“Should the world return to ‘normal’ tomorrow, we would quickly recommence in-person site inspections on new transactions,” Krawitz said. “We are able to glean even more when we send out someone from our own team to inspect the collateral, meet with the borrower and explore the wider market.

"With that said, it is likely that we will continue to use virtual inspections on smaller loans in our portfolio when it comes time for annual reviews.”