The Global Mortgage Group CEO on US and International Real Estate Financing for High-Net-Worth Clients
Robert Chadwick, CEO of America Mortgages, provided delegates at the May 11 Hubbis Independent Wealth Management Forum in Singapore with insights into the international mortgage market for HNW/UHNW clients who seek funding for bespoke residential and other properties around the globe. He explained how America Mortgages is a leading provider of non-resident mortgages for properties in the US, how the firm offers asset-backed financing as a service, and how their Global Partnership Programme works.
Chadwick introduced himself as the co-founder of Global Mortgage Group and American Mortgages. “The presentation today is about the US, the largest real estate market in the world, and which, even though also the largest mortgage market in the world, is one of the most difficult for which to obtain financing,” he told delegates. “Some data for you shows that at least nine out of 10 people around the world will mortgage when they're buying real estate, and in the US in 2021, foreign nationals bought more than USD50 billion of residential real estate, but only 32% of those used a mortgage.”
And such data, he explained, is why they created America Mortgages, which is a spin-off of Global Mortgage Group. America Mortgages, he reported, is a solution provider that helps prominent and wealthy individuals and entities secure US mortgage financing. They use more than 150 different lenders, onshore and offshore, they manage the entire process, and discretion is assured.
He told guests how the US mortgage market is highly regulated and transparent, with full disclosure of all details and fees delivered to clients within three days from closing. “There are no surprises along the way, once we have obtained approval for the mortgage,” he reported.
A big island in a vast ocean
Chadwick explained that the specific market for foreign buyers to obtain US mortgages is so small relative to the total property market – and residential property only accounts for about 5% of the total value of US property – that the banks do not focus much on this segment. “But we organise for foreign nationals to get up to 75% financing in all 50 states, and for a US expat, we can get up to 80%,” he stated.
Once the documents are assembled and loan application sent in, approvals usually come within 72 hours. “As soon as we approve their loan, and they're comfortable with locking the rate and all of the conditions, then we move forward with the process,” he reported. “If it's a purchase, most realtors will want a letter from a finance institution stating that the borrower has already been approved for a loan.”
A compressed timeframe
Chadwick also explained that a closing in the US takes normally takes 30 to 45 days. “Our clients can close the deal from wherever they are,” he said. “And regardless of age, whether 19 or 79, the clients can get a 30-year amortising loan, which obviously helps with payment and with yield if it's an investment property.”
He said there are also specific loan programmes, such as a 10-year fixed interest servicing only loan, which is fixed rate for the 10 years and then after that date automatically converts into a principal and interest 30-year amortisation facility, without any adjustment in rate for a total of 40-year tenure.
“Your clients then have the clarity of knowing that this payment funds them for 40 years, and with the rental market as strong as it is, this is very appealing,” Chadwick reported.
Tailored to suit
Chadwick said there are other facilities to suit different borrowers and situations, and that America Mortgages has a 97% success rate of approvals. “In the event that they don't actually close, it's normally an issue with the property not the borrower,” he said. “We have a 24-hour service, seven days a week, and we have 30 loan officers in 12 different countries, we speak a variety of languages, and we are in different time zones.”
The mortgage services cover loans anywhere from USD150,000 to loans with no maximum. “We financed a Swiss client buying a USD100 million property in the Hamptons last month,” he reported. “If clients own multiple properties, five or more for example, we can combine all of these into one loan, which means one cheque a month for the portfolio.”
A worldwide proposition for robust markets
He added that outside the US, they also provide mortgage loans in the UK, Australia, Canada, France, Portugal, throughout the EU, and Singapore. “Technically, we can finance residential property anywhere there is a strongly regulated and transparent property market,” he said. “We work with over 200 international lenders outside the US, and as I said, 150 in the US.”
He said they really specialise in HNW loans of USD3 million and up, and often in complex structures, with assets held in a trust perhaps, or a BVI or another vehicle. None of these loans require AUM to be vested with institutions in the US; it can be entirely based on overseas wealth and the underlying property acquired, he explained.
Chadwick told delegates that the firm also offers asset-backed bridge lending. “We started this about a year ago and it has been very popular,” he reported. “These loans focus on the value of the asset and whatever that loan to value is, and we can close within 10 days, so these are very useful for certain clients who need that type of liquidity. This is not subject to personal income, so your clients are not going to have to go through a compile all their tax returns and so forth. These facilities centre on their liquid assets such as stocks, bonds, cryptos, and so forth. LTVs for these loans of USD3 million and more are usually 60% to 65%.”
He elaborated on the documentations, explaining that clients do not need to produce tax returns or prove serviceability, but instead America Mortgages will make a rigorous assessment of the clients’ liquid assets and apply that to the serviceability of the loans.
“On average, these clients normally look at a five-year fixed loan but amortised over 30 years,” he elucidated. “We'll take that portfolio of liquid assets; we’ll divide it over the five years, and we end up with the income that they can use to qualify. But there is no encumbrance on those assets, because the day after the clients close this loan, they can actually cash it out, they can trade it, they can do whatever they want, all we want to see is for that loan transaction period, which is the 30 to 45 days I referred to earlier, that they have these funds.”
For the IAM/EAM community, Chadwick emphasised the importance of the clients not needing to send assets to the US banks or financial institutions in order to obtain mortgages. “Any major US bank is likely to say they can lend to these clients if they send a huge amount of AUM to them in advance, but that means you as financial advisors would lose AUM,” he said. “But as I explained, we do not need that AUM shifted to the US at all, it stays where it is, your clients do not need to shift it or do anything at all.”
He also told delegates that their Global Partnership Programme means the EAMs that refer their private clients can also earn a fee.
“We deliver a great service to your clients, we get them the funding they want and great terms, you do not lose your client’s AUM, your relationships are enhanced, so it is w win-win all round,” Chadwick said. “You have helped them get something that is tough to obtain and saved them a lot of time and frustration.”
He added that the EAM clients end up with an incredibly competitive product that America Mortgages is happy to compare to anything they might obtain elsewhere. “And we are also able to run rapid feasibility reviews, to make sure that they are going to get what they need,” he stated. “When we tell you that your client will qualify for a certain loan programme, we issue these with a very high degree of confidence, that refers back to the 97% success rate I highlighted earlier.”
Ready, willing and very able
He explained that the main overseas branch office is in Singapore and that they work in all time zones and across the world.
“We can provide indicative terms in the structure, often within 24 hours or even get back to you within the same day,” Chadwick said on closing his presentation. “And as to other capabilities, we can help your clients with loans everywhere in the world, we do share financing, we do crypto financing, we do aviation, vessel financing, asset-backed real estate loans, and so forth. We provide finance solutions as a service. Come and talk to us, you will be impressed, and you will be made to feel very welcome.”
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