It’s a well known fact that employers, universities, the military, and even potential suitors looking for a love connection on Match.com are now using all forms of online super sleuthing techniques to find out as much as they can about the person that they’re dealing with as quickly as possible. Clearly, no one wants to deal with a bad apple. Whether it be a hostile employee, a student with behavioral issues, a teen with strong hostilities towards figures of authority, or love interests with massive insecurities left unchecked, obtaining priceless data which provides insight on the “real you” can be quite advantageous. Nowadays, in the world of real estate finance, this level of preliminary sniffing and snooping is swiftly becoming the norm.
In general, black box underwriting is still the most efficient way to quickly churn and burn through massive mounds of loan requests. Hiring data entry specialists to field 1-800 calls or having borrowers click on website links to loan applications allows the most technologically savvy lending institutions to make “yes” or “no” decisions at lightning speed. However, in light of billions of dollars of bank losses from those who have walked away from their properties or have insincerely defaulted on their obligations, the old school underwriting mantra of People, Credit, and Collateral has become sheik once again to use in the process of determining individual worthiness for capital.
Today, it’s not uncommon for a loan officer to log into LinkedIn to determine who is “connected” to you. The website makes it extremely easy to scroll down and see if someone interested in capital is in their chain of “connections.” From this point, if someone within another’s line of connections knows the applicant, the loan officer can easily make a call, draft a quick e-mail, or send a text to see what “dirt” can be obtained on the suitor. Usually, given LinkedIn’s professional slant, one can determine your work related shortcomings, but it’s not uncommon to find out about a suitor’s personal faults with their moral compass as well.
In addition to LinkedIn, Facebook is another online service that is used quite frequently not only by admissions officers at universities to screen for entrants that don’t match its student body profile, but also by banks for whom maintaining customer profiles is important. Facebook postings with pictures of the office party gone wild with way too much alcohol can be damaging when you’re trying to obtain capital to expand your business (especially if you’re “tagged” in the photo). At that point, there is no denying the facts by stating “it’s not me.” For those who don’t make their profiles private, the “about me” section on the website can be the dagger in the heart, as all of the individual’s online factoids matches up line-by-line with their loan application.
LinkedIn and Facebook are two tools to garner professional and personal insights into someone on the other side of the table, but a good ole’ fashioned Google search can be just as deadly. The drunk driving arrest, the lewd conduct citation, the bank fraud indictment, the racketeering charges, the prison records, and an entry in Megan’s Law sex offenders registry are all easily obtainable by plugging in a name and a couple pieces of additional information (i.e. using a city of residence or company name) and pressing “search.” I’ve personally worked on a file where a prospect had been indicted for allegations that made the borrower appear to be a mafia kingpin. In spite of the fact that the borrower was fully exonerated and all charges were dropped, it was too late. Once the lenders pressed, “send,” the innocent were already guilty and no respectable institution would finance the prospect regardless of his legitimate, sufficient income to support the loan request. Accordingly, one can surmise that in many cases you don’t always want to be at the top of a list of search results in a Google query.
Without a doubt, the Internet has revolutionized how we all do business. It has increased our productivity and made us more efficient. Unfortunately, it has also made our lives less private and more exposed to the world’s eyes and purview. The borrower who wants to hide their past may believe that their indiscretions are in secret, but in the end it’s best to be forthcoming. Even if one has nothing to hide, it is a good idea to check what has been written about you in cyberspace. The world is cruel and websites like Yelp, Angie’s list and message boards of all sorts are dealing data on companies daily. Therefore, do you have any indiscretions that others don’t know about (yet)? Are their compromising photos or stories about you or your business on the World Wide Web? Will a quick query on Google tank your acquisition and development loan? It could be a worthy exercise to see what is written about you in the black hole called the Internet, and you may want to think twice when your loan professional wants to “friend” you on Facebook!
Preston Howard is a mortgage broker and Principal of Rose City Realty, Inc. in Pasadena, CA. Specializing in various facets of real estate finance, he can be reached at howardpr@rosecityrealtyinc.flywheelsites.com.
