The Internal Environmental Review is intended to be used when a borrower already owns the property and no innocent landowner protections are available under State or Federal law (as is the case with a new purchaser who completes a Phase I ESA).

Similar to the Transaction Screen, the Internal Environmental Review is not intended to satisfy any innocent land owner defense or offer any liability protection for a borrower or a bank. It is designed to be more flexible in Scope than a Transaction Screen, and is a reasonable attempt to determine the environmental concerns on a property and exposure to the bank in the event of default. This process is intended to be less expensive and, in most cases, less exhaustive to complete than a Phase I ESA, and can be an efficient way of assessing environmental risk in a refinance transaction.

The purpose of the Internal Environmental Review is to gather enough information regarding a property to make an informed environmental risk decision. The scope of work can vary greatly depending on several factors, including property type and use, historic operations, loan amount, loan to value (LTV), new loan to the bank vs. existing mortgage, etc. PME’s objective would be to gather as much information about the transaction as possible so an appropriate scope of work can be proposed.

The scope of work can be as simple or as complex as necessary, but will generally include a combination of the following tasks:

1. A site reconnaissance, at which time owners/occupants would be interviewed.
2. Review of Environmental Databases for the subject property and nearby surrounding areas.
3. Review of any previous environmental information (i.e. correspondence, reports, etc.) provided by the bank or the borrower.
4. Review of pertinent historic sources (if available) including Sanborn maps, aerial photographs, city directories, etc.
5. Review of governmental agency records including City Building, Assessing, Engineering and/or Fire departments, and
6. Review available MDEQ records for the subject property.

Once the appropriate tasks have been completed, PME will prepare a brief summary report summarizing the information gathered, with appropriate conclusions and recommendations given.

Recommendations made by PME would be based upon several items, including the known or suspected environmental condition of the property; known or suspected environmental risk identified; loan amount and LTV; transaction type; bank’s relationship with borrower; and the bank’s environmental risk tolerance for the subject property and transaction.

The turn around time to complete the Internal Environmental Review is typically 5 to 10 business days, depending upon information/historical sources requested.