Mortgage Financing Primer

INTRODUCTION

Although lawyers are ostensibly hired by lenders to put the security into place or by borrowers to make sure the loan gets funded, real estate practitioners that are armed with some basic knowledge of the business fundamentals of a mortgage commitment can bring added value to their clients, whether borrowers or lenders, by finding financing opportunities, negotiating the terms of the commitment and dealing with problems that arise in the course of a funding.

It is beyond the scope of this paper to go into an in depth review of every type of financing and the nuances for each one of them. However, what I hope to paint is a broad picture of the various types of financing that are available in the marketplace and some of the key business and legal issues that arise when negotiating and implementing these transactions to better equip real estate practitioners in the course of their daily practice. The main focus will be on financing residential development as one of the hottest areas in the current real estate development market.

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