Commercial real estate-backed lending generally requires consideration for addressing environmental issues. Traditional due diligence methods used by commercial lenders often only consider historical issues with the property and leave the lender with the costly risk of retaining potential liability or a compromise of the collateral due to the discovery of an environmental condition. Lender Environmental coverage can provide a solution to these concerns and can be structured for either a single transaction or on a portfolio basis.
Lender Environmental Portfolio Program
We offer a Lender Environmental Portfolio program that provides commercial lenders with a cost-effective alternative to traditional due diligence and transfers their environmental risk to an “A” rated insurance carrier. Levering our own technology, we created an advanced online system that automates and efficiently handles all aspects of the program. Policies are dynamic, with loans added during a given period of time, and can be structured for terms up to 13 years.
Clients that are a good fit for a lender portfolio policy are organizations that originate, hold and service commercial real estate-backed loans such as banks, credit unions, mortgage bankers and other commercial lending institutions. A portfolio program can provide many valuable benefits for these lending organizations.
Benefits of Lender Environmental Portfolio Insurance
Protect lender assets by protecting against the loss of collateral value
Transfer lender liability on collateral or REO property
Reduce or eliminate the cost of traditional environmental due diligence
Reduce risk associated with financing certain commercial real estate
Better manage cash flow in the event of a pollution claim
Streamline the loan process
Enhance capital market deals
Gain a competitive advantage
Single Transaction Lender Environmental
Under a single transaction basis, coverage is for a collateral property or properties securing an individual loan. Coverage is designed to protect a lender against the loss of collateral value in the event of a loan default accompanied by a pollution condition, and it can also respond to third-party pollution liability claims against the lender or to the discovery of a pollution condition at a foreclosed or lender-owned property.
Utilizing lender environmental coverage can provide a lender with confidence in funding those loans within their appetite that could not proceed due to known or perceived environmental liabilities. Whether coverage is sought for a single transaction deal or by a portfolio client for their loans that do not meet the parameters of the program, our lender team is positioned to effectively get coverage placed through our extensive product experience and understanding of the evolving market.