Commercial Loan Modification: The Economic Necessity

Real Estate Commercial Group can assist business owners with the restructuring of their mortgage loans, a commercial loan workout can be obtain through assistance of our experienced and highly skilled group of former commercial bankers.  Real Estate experts agree that commercial foreclosures follow residential foreclosures during difficult economic times according to Reuters –

“Commercial property loans originated in 2005 to 2007 that increasingly carried risky terms are likely to see a significant increase in defaults in 2009 due to lack of credit, falling property values and reduced cash flow.”

With the economy in an ongoing recession, more and more businesses are having trouble meeting their obligations on commercial real estate loans.  The ever increasing number of defaults has prompted commercial lenders of all sizes to become more willing to renegotiate the terms of commercial mortgages to help avoid a default.

A commercial loan modification is seen as the new solution for both business owners and lenders to endure this difficult economic period.  With widespread bankruptcies and foreclosures, action needs to be taken immediately to stop the flood and to prevent a meltdown in the commercial sector.  As such, the FDIC has encouraged lenders to pursue “creative solutions” to stop this tidal wave of lost loans yet stopping short of an intervention to allow the marketplace the flexibility to work out its own solutions to the individual problems of each client.

The commercial loan workout process is for a business or individual that owns a commercial property such as a strip mall, shopping center, apartment building, warehouse, office building, etc., agree with the mortgage holder to permanently change the terms of the original note.  The modification is an adjustment of the terms of the current loan such as a lower interest rate, a fixed rate or even a lower principal allowing the loan to be re-established for a lower, more affordable monthly payment. Our company will work with your lender to request a modification and will do so by applying our vast knowledge of the industry and under complete confidentiality to your personal file and any data you provide to us.

Possible types of a commercial loan modifications:

Interest Rate Modification – Your lender(s) agree to lower the interest rate temporarily or permanently.

Term Modification – The repayment period of the loan is extended out to its original term or to a term that will be sufficient to address the problem.

Principal Balance Reduction – The lender(s) agree to reduce the principal amount owed wiping out a portion or all of the negative equity a person may have do to the drop in real estate values.

Interest Only Payments – A period of time that a lender allows for an interest only payment period with the principal being re-capitalized after this period resets.

Forbearance – A reduction of the principal and interest payment for a period of time after which the portion of the P&I that was given“forbearance” is placed at the end of the loan and recapitalized.

About Real Estate Commercial Group

Real Estate Commercial Group, based out of Chandler, Arizona, was formed by a group of real estate and banking professionals to act as an agent to property owners and to act on their behalf in negotiating a loan modification or commercial loan workout program between said client and the mortgage holder.  Our clients are typically owners of real estate that are faced with a possible commercial property foreclosure or are in the foreclosure process.

The Real Estate Commercial Group is prepared for the current and ongoing commercial foreclosure explosion.  We act fast to prevent commercial foreclosures and to create a work out plan that can benefit all parties involved.  The company provides our clients with the information and facts necessary to help them make well informed decisions to prevent a property foreclosure.

Upon review of the preliminary information and the documents supporting the information provided by the client, we engage the lender to negotiate and obtain a loan modification.  We strive to obtain a commercial loan workout for our clients as efficiently as possible and to keep their business operations afloat.

Every case is different and every case leads to corresponding solutions.  It may be a loan modification, short sale or other program that our loss mitigation professionals can provide.  There are many factors that determine on what basis a lender will modify a loan.  Some of these include the client’s source of income, payment history, debt ratio, equity and more.  Our experts in the arena of commercial loan mitigation will walk the client through the process and try to provide for a workout whereby everybody can walk away satisfied.

Our commercial loan workout team consists of experts within the industry with tested and proven expertise.  We aim to help the commercial property owner and we are only satisfied with extraordinary success.

We offer commercial loan workout services nationwide