“It’s a New World”
Earlier this week, the above words were spoken to me by a client who six months after signing a loan application and putting up a considerable deposit with the lender, decided he wanted to renegotiate the original terms because he felt that in his view the deal terms were no longer relevant to the current market. This occurred after nine months of effort by three members of our team, myself included, to recreate the books and records of the project into a legible format, shop the deal to over 60 lenders and then toil away on the due diligence for six months which, incidentally, happened to be like pulling teeth at times with the client’s organization. The lender had done their part by figuring out how to accommodate an unusual structure that included a second mortgage from a government agency that had to stay in place behind their loan.
In addition to this announcement, my client informed me that he didn’t feel that I was providing adequate service in representing his position vis a vis the lender. I was accused of “just trying to get the deal closed” rather than represent his best interest. I responded to my client that I had no idea that he wasn’t happy with the terms; he had negotiated and accepted the term sheet on the table with everyone acting in good faith and had never expressed hesitation to move ahead, and that I consider myself a good broker, and that’s what good brokers do, they find ways to get to closed. I also noted that he had hired me to provide guidance as to what the market would bear, and he had decided that we were no longer at “market” deal terms without consulting with me as to what I thought of the prospects of getting a better deal.