Seems silly, that in many instances the borrower has already attempted to achieve various workout accommodations yet failed miserably, yet with the same fact pattern, same borrower, same everything, the ‘third party expert’ can accomplish what was already proposed and refused and in many cases do a lot better.
There are a number of reasons this works out in this manner, but the basic logic that supports the entire approach is that the borrower is the bad guy. Not to be trusted, having breached his word many times. Having breached the agreement making everyone looks bad especially the banker who wrote the loan.
Unfortunately, but true, the breach of trust makes it very difficult for the banker to do business with the borrower especially when the borrower is now asking for large concessions.
As a third party expert, my opinion is regarded with a degree of respect, professionally delivered and supported by my confirmation of the situation which while obviously in favor of my client at least comes to the banker with a degree of clean credibility. I did not breach the agreement nor break any promises; the borrower did, so we can do business despite the borrower’s bad behavior…so it goes.
Furthermore, the third party expert knows how, and what information to deliver and in what form, so the banker can more effectively do his job.
This is not about selling out the client and serving the banker, not at all, it is about doing business with a win-win attitude and full cooperation within that context.
Then add expertise and experience, the kind that seasoned workout specialist can bring to the table and the banker can rely upon and now we have a deal in the making… progress.
Yes, bankers are unfortunately frequently driven by emotion and the defaulting borrower is not the banker’s favorite person. In fact there may be significant ire created by the borrowers default and ensuing stories of turnaround success that never materialize, leaving the banker with the conclusion that the borrower is a liar, trying to get away with something, incompetent, and certainly not to be trusted…How can the borrower expect fair treatment and a successful workout under such circumstances.
There are many additional reasons why a third party expert can accomplish more than the borrower, which goes to the skill and experience of the expert, but the entry point, the difference between the expert and the borrower begins with understanding that the borrower is the bad guy and the expert is the good guy…it only gets better from there, if the expert is truly good at what he does.
