TODAY we are celebrating the completion of the pre-drywall construction phase at the Michelle Frost & K.C. Boyce residence in Decatur, GA. In anticipation of the event, I recalled the heroic effort that was made with the financing we arranged for the 601 Third project. First off, this is an extremely high-profile project which is going to be featured on a Discovery Communications “greenovation” program. Secondly, K.C. works with a group of folks who are pretty engaged in sustainability here in my hometown, so a recommendation from him is something we really hoped to receive, assuming we deserved it. Finally, our assignment was to provide a loan for a green building and as the nation`s leading green loan incentive program, if we didn`t come through, we had bigger problems than not closing a loan. Here`s a recap of the events that at the time seemed EXTREMELY difficult. These days…I wish I had more of those “easy” deals in the pipeline. The borrowers were very well qualified and they reached me by referral from their contact at EarthCraft House ( After much finance shopping, K.C. & his wife, Michelle, determined that while the loan package had great competition, it made the most sense to work with myEnergyLoan where they could receive the myEnergyLoan efficiency credits and work with a lender who “gets green building.” My choice for loan officer was Norm Wagner, a senior loan officer on my team, mainly because Norm is a phenomenal loan technician and the construction loan market was quickly whithering on the mortgage vine. We needed the best loan officer on the team, and Norm is it. We quickly got the automated loan approval and felt confident our program, a one-time-close construction loan, was a.) most efficient loan program and b.) the most-likely-to-close-smoothly loan program. Boy, were we wrong! Without naming the lender we selected (I will call them a new addition to a large bank in America), we realized that the lender was sending a great deal of mixed messages. Finally, after enduring unreasonable requests we were forced to make of them, K.C. and Michelle became so frustrated that they nearly fled us for another lender. Norm saved this deal on that day, by picking apart another lender`s loan offer and proving that ours was FAR BETTER! The central issue was that the lender we chose (hint: all across the COUNTRY are double-WIDEs) this lender, literally changed its construction loan requirement in mid-stride…several times. I remember thinking many times “usually, banks want to close loans for qualified borrowers…why not this one, why not now?” I simply could not believe the requests and conditions. They were asking the borrowers to clear unpublished conditions – things like CASH AND LOTS OF IT! Things like DOCUMENTATION AND LOTS OF IT! Once, they requested an obscene amount of updated information – during a period of time when the items they already had in their possession were current. Contingency and interest reserves guidelines were thrown out of the argon-filled window and it seemed obvious to all of us that this lender simply wanted us to take a manual denial and go away. They did not want to do this construction loan but they gave us no GOOD reason why. The bank went so far as to tell us that our appraisal was reporting a value of $100,000 higher than what their new “quality control check” revealed while they were doing a routine title check. I suggested that they needed to immediately get somebody with AUTHORITY to fix the glitch in their non-existent QC program! Their statement was not only obnoxious, it was outright ridiculous. No…it was re-donk-u-lous, it was so assinine. Remember, we do good business and we knew that our appraisal was tight and right on the money. We even got two additional comps to prove it. The bank still wouldn`t budge. We fought and fought and called in our top brass in an effort to close this deal, which of course HAD to get done on time in order to make the filming schedule with the Discovery Channel. Those high-strung TV guys and gals really don`t like changes in their schedules, ya know, but they had nothing on us when it came to being high-strung! I literally saw a denial as the end of myEnergyLoan…denial was not an option. Michelle and K.C. put together a dream green team for their project. We had great borrowers, a great builder (Renewal Construction), a great appraiser, a fantastic mortgage broker (HomeFirst Mortgage) and a great loan incentive program. Just what was going on? We stepped up our game as we traced detail after detail until we simply out-smarted the bank. The number of e-mails that went back and forth was mammoth – I think we single-handedly consumed like half the broadband available worldwide during early November 2007 as we made the case for our borrowers. Finally, we won. We actually won the appeal. Usually a denial is a D E N I A L, denial, unless you do such good business that a denial for one of your files seems really out of place. Thankfully, we do and it did. Our appeals went to the very top of the underwriting food chain at this bank and finally, after forcing the borrowers into what we felt was a completely unreasonable deal structure, to which the borrowers conditionally agreed, we closed on a Monday night around 5pm. One-time-close construction loans actually look like refinance loans since they have two parts – the construction financing part and the permanent financing part – so there is a three day right-of-rescission that must expire before the loan funds. In this case, that meant the loan was funding Friday. Thursday (one day prior to funding) the lender closed their wholesale lending construction division and the note that went to the industry read something like this “if your OTC loan is not already closed by today it will not fund with _____wide bank.” Ours was and it did. I smacked my forehead so hard I should have had a V-8…the lights went on immediately. That was a grueling loan that ended up being the third-to-last OTC construction loan Countryblank funded through its wholesale lending division. To say this loan was a major hassle for everybody would be a gross understatement…myEnergyLoan and HomeFirst Mortgage never made even a single mistake on the file, but we maxed out the allowable contribution in order to extend our condolences to the borrowers. At the end of the day, the borrowers received a $3,300 myEnergyLoan efficiency credit through HomeFirst Mortgage and we licked our wounds for weeks afterwards. It was a bloody battle, to say the least. And why? Apparently, there was never an appraisal problem. There was never a borrower problem. There was never a problem with our loan file – at all. The problem was that the bank (which is now under serious investigation by multiple three letter agencies) no longer wanted to be in the wholesale construction loan business and it appears to me that they were willing to side-step commonly held and federally mandated tenets of ethical behavior in order to deny (aka put the screws to) my borrowers. Obviously, we didn`t let them – we couldn’t let them. We were in too deep, but the bank was in far deeper. They tap-danced better than Shirley Temple in “Just Around the Corner” in a way that simply had to have been choreographed and rehearsed. They had another option – they could have quietly told us they intended to shut down the division and we would have quietly gone away. Instead, they chose to be unethical and elusive, at best. The truth prevailed, my friends, and that very difficult loan made it to the closing table and closed. These days though, that loan looks like an easy-breezy loan file. It`s that bad out there now. Fortunately, we are still getting loans closed, it`s just a lot more difficult now that the equity market has been crushed to death and the second mortgage market is being beaten like a red-headed step-child. Oddly, we love the challenge and we see hope where many others see nothing but failure, doom and gloom. After all, our builders, our EcoBrokers and our borrowers are part of the solution…and that is nothing short of exciting! In case you didn’t know, green buildings solve problems, but people build, sell and buy green buildings…and it’s the most fun space in real estate today, bar none. Now, for the good news (since I like ending with a little good news from time to time): TONIGHT myEnergyLoan will be providing refreshments at the Frost, Boyce open house at 601 Third Avenue in Decatur (3/21/08) from 4pm to 7pm and again on Saturday (3/22/08) from 9am to 1pm – and you are invited! It`s a pre-drywall celebration where you can see all the super cool green features before they get covered up and finished! We hope to see you there! See K.C.`s blog at for step-by-step details on the greenovation construction and his much more delicate handling of the events that transpired as this greenovation was being financed. We love you, Michelle and K.C., and congratulations on the progress at 601 Third Avenue, Decatur, GA. – JC