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Relief for 'Continued Frustration' of Conduits

NEW YORK CITY—The risk that a B-piece buyer can scotch a conduit loan is one that many borrowers aren't willing to incur, says Barry Polen with Hunt Mortgage Group.

By Paul Bubny | paulbubny | Updated on May 02, 2017

Photo of Barry Polen Borrower frustrations with conduit loans are “exactly what our program was designed to avoid,” says Polen.

NEW YORK CITY—From the standpoint of borrowers in the $7.5-million to $25-million range, a go-to financing option is conduit debt. It’s also a source of “continued frustration,” says Michael Becktel, managing director of Hunt Mortgage Group—the kind of ongoing headaches that led his firm to develop a new proprietary loan product intended to provide an alternative.

Becktel and his Hunt Mortgage Group colleague, managing director Barry Polen, cite a number of factors feeding this frustration. “One is that there’s not really certainty of execution, so borrowers get re-traded on spread, often right at the closing table,” Becktel tells GlobeSt.com. “They think their spread is going to be one thing and they find out at the last minute that it’s higher.”

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