The economic and real estate situation has brought with it a reduction in revenue and property values that have hit both lenders and borrowers with a substantial impact. In the past lenders cured default by foreclosing and reselling the property. This can still be done today but because commercial lenders are experiencing widespread losses loan modification has become the accepted solution rather than foreclosure.
The Commercial Loan Modification Process
Initial Qualification
The first step in commercial loan modification is a review of the borrowers financial position and the profit/loss position of the property in question. If we believe that conditions exist for a compromise and restructure of your current commercial loan we will inform you and propose that we proceed. If we do see an opportunity for a workout situation we will notify you and may suggest an alternative course of action.
Application
After the initial qualification we will then furnish the borrower with a complete application packet and instructions for
completion. When we receive a completed packet we will contact the lender regarding the submission of lender specific paperwork and inform them that we are working with the client to
submit a modification proposal. After a full review of the application we will develop a proposal and forward it to the lender's loss mitigation department.
Review
During the review phase of the process
we will communicate and negotiate with the
lender. We will also furnish the borrower with case updates on a regular basis. Because many
lenders are
currently inundated with modification requests this part of the process usually takes the most time.
It may be up to 90 days before the lender begins their part of the review process.
Negotiations
The negotiations process normally involves both time and additional supporting documentation. Most lenders are willing to come to an agreement as long as they are satisfied that the borrower is both willing and able to service the debt at a level that provides the lender a better return than a foreclosure and sale process. Our experience and relationships
with lenders bring added value to our services and can make a great deal of difference in the final results of this phase.
Agreement
When an agreement is arrived at the lender will prepare and deliver the
required documents to the borrower. After the documents are reviewed and found to be in order the agreement will be executed and the loan modification will be complete. Some lenders may require a trial payment period before the modification in finalized.
Find Out If Your Commercial Loan Qualifies For Modification
Complete the form below and let us evaluate your loan and your lender's willingness to mofiy your loan. In most cases we will contact you the next business day or sooner with your determination. There is no charge for your initial assessment.
