This type of contract is usually for large construction loan projects.
In 1974, with considerable panache but relatively little cash of his own, he embarked on his first resort project as a partner with Hyatt Regency, persuading a group of 16 bankers to lend him $75 million, then reportedly the largest construction loan in Hawaiian history.
"There could have been developers who wanted to build, but they couldn't find a bank or lender to write them a large enough construction loan at the time.
Corus Bank, which was closed by regulators on Sept. 11, had a large portfolio of distressed construction loans, many of them tied to condominiums.
City Federal, which was seized by the government in December, got into trouble with large commercial real estate and construction loans in Florida, New Jersey and Texas.
Although data on multifamily construction is volatile, housing analysts said the drop in apartment and condominium construction reflected the excess supply and tight markets for construction loans on larger projects.
Foresight's estimates of the proportion of problem construction loans in the 20 largest metropolitan areas has one surprise: the one with the largest proportion of troubled loans is Seattle, where the recession has started to pinch.
"The loan we're making is, we believe, the largest single commercial construction loan ever made in the history of this country," said Robert D. Feller, the president of North American operations for the GMAC Commercial Mortgage Corporation, when he announced the $1.1 billion construction loan and $200 million in other financing.
Lenders generally see construction loans as riskier than other loan types, in large part because if a project falls apart, the lender is left with a partly finished building that does not generate revenue.
