COLORADO SPRINGS, Colo. – When it comes to making real estate loans or joining participations, "stay local or at least within your own state." That's the advice of Charles F. Emmer, president and CEO of Ent Federal Credit Union here, who spoke on a business loan panel at the annual Colorado Credit Union League meeting here. "Unless you really know your borrower or can hop on a plane and visit the site, out of market real estate loans can be risky," warned Emmer citing the traps that large banks fell into during the l980′s and early 1990′s. Emmer, a former top Bank One executive in Colorado before taking the Ent job, maintained that given the current economic climate his own CU is careful about real estate loans and is steering away from participation credits "since we don't need them. It's our preference" Ent's overall business loans have been on a steady growth path, he noted, reaching $60 million, a jump from just $20 million two years ago. The $1.6 billion Colorado Springs CU, the largest credit union in the state, has witnessed a healthy jump on the real estate side in such areas as office and apartment buildings, warehouses and small retail shopping malls. It also has done equipment and working capital financing. But whatever the case, participation real estate loans require extraordinary scrutiny, Emmer warned the Colorado League audience. "When you're in Colorado, you cannot know the myriad factors that are coming into play on a participation loan in Florida," declared Emmer. "You have to have somebody there who understands the operation and management of the property before taking on the credit," said Emmer who was joined on the League panel by Robert Lehman, manager of corporate real estate banking for Ent and also a former Nevada bank officer. Citing the experience of both himself and Lehaman in making real estate loans, the Ent CEO cautioned Colorado CUs that a borrower's track record has to be carefully considered and "in this kind of economic cycle" many precautions have be weighed. "When purchasing a participation from another credit union, it is crucial you have an experienced individual at the other end who has your 100% interest in the transaction," advised Emmer. He stressed that the rep must "stick up for you in the transaction. That is why you must have a staff that is experienced in commercial real estate." "Don't let the originating or lead credit union make decisions for you," he added. The problems that large banks had across the country during the boom periods of a decade ago were traced to not-knowing-your borrower. "If you're in Michigan, can you really understand beach erosion or are you aware of environmental concerns and what that might do to the real estate market in Florida?" he asked. "It can be quite tricky when you are a few time zones away." [email protected]