commercial loan modification
Short of a commercial loan modification, commercial property-owners may suffer the consequences of losing their income-producing asset, which subsequently will produce unwanted repercussions on the economy. Lending institutions will feel the effects severely if they have non-producing assets in a market flooded with foreclosed properties.
The logical solution is for banks and commercial borrowers to agree on a beneficial modification. There are various modification methods a bank can take. One way is for banks to decrease their rates permanently or temporarily, which can help borrowers avoid foreclosure. A fractional drop in interest rate may eliminate tens of thousands of dollars from a property-owner’s annual debt burden.
The point is to give borrowers time to turn their property back into a positive-cash-flow business. Alternately, banks might extend the maturity dates on loans. This would push back untenable balloon payments and keep the borrower in business.
Because of the technical and legal aspects involved with restructuring a commercial loan modification, many property-owners may ignore their position and accept foreclosure rather than save their investment. Commercial loan modification companies exist, however, and at times can help stressed property-owners navigate the complex procedures, negotiations and nuances associated with a successful loan modification.
These full-service loan-restructuring companies often have experienced and educated business executives who know their way around a business plan, as well as lawyers, accountants and real estate professionals on staff. They could provide comprehensive and individualized restructuring programs.
By leveraging these professionals’ combined experience, knowledge and industry relationships, these companies often can guide commercial property-owners through a loan modification. With a successful loan modification, property-owners can avoid foreclosure, increase their cash flow, weather market changes and be in a stronger position when the economy recovers fully.
A commercial loan modification company will advise borrowers and negotiate on their behalf during the process. The best loan-restructuring companies typically do all the work and negotiation while communicating what is happening to the property-owner at each step of the process.
Mortgage brokers looking to help and develop long-term ties with their commercial property-owner clients should consider establishing a relationship with a reputable commercial loan-modification company. Clients who face foreclosure likely will not forget the broker who helped them find help in a time of financial crisis. In addition, some commercial loan-restructuring companies have referral programs for established brokers.
When facing a potential foreclosure, a property-owner may find a commercial loan modificationto be the best solution. The process is rigorous and labor-intensive and requires people with the tenacity, skill and experience to deal with banks, lawyers and real estate professionals. As such, mortgage brokers with commercial property-owner clients in the pre-foreclosure stage or clients heading into turbulent times may find a worthy option in a professional loan-restructuring company that focuses on commercial loans.
Being approved for a Wells Fargo commercial loan modification should not be as difficult of a process as the lender makes it out to be, especially since a loan modification is usually more profitable for the lender than a foreclosure, but a combination of under staffed offices and unknowledgeable lender employees makes the process all the more difficult.
One aspect of winning a fair loan modification deal from a lender is a strong negotiation. Business owners know the importance of negotiations, but under the circumstances, often fail to do what is best for their business. When a business owner is faced with the threat of foreclosure, they often look for the quickest way out of their problem so that they can get right back to work, but this tactic often does little good for the business owner in the long run.
In any other negotiation setting the business owner would be strong, committed, and resilient in their efforts, but when their very existence as a business is on the line, they sometimes become weak and short sighted. This is why it is best for the business owner to hire a third party to handle the negotiations, preferably an attorney. Attorneys can represent the business owner through all phases of the negotiation and can offer an outside perspective of the entire situation. Also, attorneys will be able to apply legal pressure to the lender that can compel them to agree to the lowest rates possible
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