Conduit Loan Assumption Nightmares

Simple RE recounts some difficulties in assuming a conduit loan.

It sounds like its a bit of a cumbersome process. But he makes the excellent point that with conduit loans now up to anywhere from 150 to 300 basis points more expensive than they were at the beginning of the year (according to what we've been hearing and reading), assuming older, less expensive loans will be an attractive proposition going forward.

He also wonders if there's a market for "premium servicing" since he's finding that getting answers from services can be a challenge.

When we first submitted the application for the assumption we planned on closing the deal by the end of August. Thankfully our buyer (the assumptor) is very motivated to close the deal and has been very prompt in providing all of the requested documentation about himself and his entity.

After several phone calls and emails looking for confirmation that we were on track for an end-of-August close, I finally received an email saying that closing in August will be impossible. I called again this morning to find out what the new timing would be (of course Key Bank didn't include that vital bit of information in the original email response). I looks like we are more likely close around the end of September. The explanation for the delay... there are other borrowers with looming exchange deadlines. Pam, the rep I've been working with hasn't been able to get our package together to submit to the Special Servicer who is the second step in the assumption process. AAAARRrrrrggggg!

OK, so lets assume you are in my shoes someday. What should you do?

Update: David Stejkowski over at Dirt Lawyer's Blog chimes in on the subject.

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