can be a great
tool to help
Jim Picciotto (NMLS# 12456) is a senior mortgage loan originator with TCB. He has expertise
in financing international clients from Europe, China, the Middle East and other countries
around the globe in the Boston real estate market. Picciotto has 30-plus years of experience
assisting high-touch U. S. and international borrowers with complex finance and asset management situations. He excels at minimizing risk, executing holistic strategies and forging
long-lasting relationships. Reach him at firstname.lastname@example.org or (508) 922-6762.
You also will want to confirm that the borrower has either a U.S. Social Security
number or an ITIN (Individual Tax Identification Number). To purchase U.S. real
estate, a foreign national must have one or the other of these. Not every Realtor
or CPA who brings you a potential international borrower will know this, so it is
good to check early.
U.S. permanent residents or foreign nationals currently working in the U.S.
should have Social Security numbers. For those not eligible for a Social Security
number, the ITIN application process takes six to nine weeks, so your borrowers
will need to have this in hand upfront.
There also will be some additional due diligence required of your bank’s financial intelligence unit. In every case, when working with an international borrower,
you will need to know:
n The country and address of the borrower’s permanent residence;
n The type of document the borrower holds to enter the U.S. legally;
n If the borrower is a “PEP,” or politically exposed person; and
n If there is any readily accessible negative media about the borrower.
In addition, you must screen for money laundering, fraud or terrorism issues,
including performing anti-money laundering (AML) and Office of Foreign Assets
Control (OFAC) checks. If you find red flags, don’t delay in raising the issues. If
you don’t feel right about a borrower’s responses to your concerns, inform that
borrower promptly and honestly that you won’t be able to move forward.
When it comes time to underwrite a foreign-national mortgage, success requires
bank leadership and an underwriting team that is flexible, accessible and
Just like with U.S. borrowers, you will need to verify the origin of your applicants’ assets, their current employment and likelihood of continuance, their
good credit and the quality of the asset being purchased. In addition, international borrowers will need to have a way to convert their income and assets into
U. S. dollars.
In most cases, the internet can be a great tool to help you verify information
about your international borrower, although there are exceptions, such as China,
where the internet is heavily monitored and censored. Thus, when working with
international buyers, there will be times when your team will need to think outside the box to find different-but-equivalent ways to satisfy requirements.
Verifying employment right before a loan closes is almost always done with
a phone call for U.S. borrowers, for example. Due to time differences with international employers, however, you might need to make the verification by e-mail.
In lieu of obtaining a borrower’s first pay stub, you might accept the borrower’s verified employment contract or offer letter as proof of employment.
When it comes time to close and transfer the loan to the secondary market,
you may find there are some special considerations when dealing with international borrowers. If the borrower won’t be in the U.S. to attend the closing, for
example, the lender may need to allow a power of attorney.
You also may need to determine if the borrower has opened a U.S. deposit
account for Automated Clearing House, or ACH, and other asset costs. Lastly, you
will need to ensure complete, accurate closed loan packages are in place for a
clean transfer to an MBS (mortgage-backed security).
n n n
It may be time to expand your range as an originator — and your lenders’
definition of community — to include the global village. With advantageous
loan terms and the prospect of new loyal, multichannel customers, a foreign-national mortgage lending program can help a community bank thrive. Just
as rewarding, you’ll be adding an ever-growing circle of friends around the world
to the enduring relationships you’ve built in your local community. n
80 Scotsman Guide Residential Edition | ScotsmanGuide.com | November 2017
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