Complex Loan Structures: Relevant Legislation, Features, Securities

Diploma of Finance and Mortgage Broking

Table of Contents
1. Relevant Legislation...........................................................................................................3
2. Complex Features of a Client Situation and Needs............................................................4
3. Complex Nature of Securities to Be Taken........................................................................6
4. Forms of Security to Be Taken For Complex Loan Structures..........................................8
Answer to Questions................................................................................................................11
Bibliography.............................................................................................................................18

1. Relevant Legislation
Identify and outline the key features of the legislation relevant to the implementation of
complex loan structures, including all relevant state and territory legislation, charges and
taxes.
For every process defined in the implementation of complex loan structure performance
standard has been established are as follows:
- Manage Implementation actions
Client’s complex situation is being analysed and reviewed for the purpose of implication
process and such process includes various components assets, taxation issues, income and
expenditure details, securities categorised in complex nature, security taken for the purpose of
complex transactions, or any other complex issues need to be considered appropriately. Each
action need to defined with respect to their time and ensure that the activities are conducted
as per the requirements of the client’s specification.
- Effective process to execute the plan
Identify each employee either internally or externally to execute the actions of the loan and
gather more and more information generated from them. Further, take the support of few
professionals such as accountants, lawyers wherever necessary to ensure that every process is
able to execute efficiently. The procedures should be reviewed and monitored on a
continuous basis so that any loopholes can be encountered accordingly.
- Control actions
Client will be given a hint what sort of actions will be taken to complete the process and
every personnel will be instructed accordingly. Also, where joint implementation is
necessary, follow-ups need to execute on a regular basis. As per the requirements, fees and
charges would be obtained from the client. Lastly, in case of any concern, the same will be
considered appropriately and actions would be taken to deal with the same.

2. Complex Features of a Client Situation and Needs
Explain each of the following types of complex features that you may encounter in a client’s
situation or needs:
a. Commercial Loans:
It’s very hard to understand the basic needs and conditions of commercial loans. Even if, a
purchaser has found the required property as per the need, but that is actually not the end, the
situation conflicts with the various natures of loans and which loans need to take up for
another level is another very critical issue. Further, it’s not necessary that every property
would get bifurcated into the list of commercial loans. The distinct character of commercial
real estate has made the situation complex, as a result of which, every situation has their
concept to reach to the conclusion. The commercial loan include Long-term fixed interest
commercial mortgage loans, Interest only payment loan, Refinance loan, hard money loan,
Bridge Loan, Construction Loan, Blanket Loan. Also, even commercial real estate loans have
different categories that include apartment buildings, office buildings, retail buildings,
medical facilities, warehouse and industrial facilities, hotels and resorts, land developments.
Apart from these every loan has their own set of terms and conditions, which makes the
decision even more complicated. Only knowledgeable and well educated person would be
able to figure out which decision would be more helpful.
b. Chattel Leases:
Although, Chattel lease is one of the smartest options to run and extend business effectively
but, even this sector also need lots of research in which, one need to understand about the
client condition especially with respect to opportunities and constraints. Whether the loan
terms and conditions highlighting something exclusive or the standards are new and hence,
every piece of details is very much essential for this ground. The complicated financial issues
need to know from every end that includes economic condition, tax perspective, insurance