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There is no further denying that the bubble is about to burst for the Commercial Real Estate market as it did for the residential market back in 2006. In the next five years, it is anticipated that $1.4 trillion become due on a majority of commercial loans. Most of which will find themselves "upside down," where the amount of the loan on the property is more than the actual value of the property itself. Consequently, many commercial borrowers are already in default of their mortgage payments facing a huge balloon payment with no further financing available.
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WHAT IS A COMMERCIAL LOAN MODIFICATION?
A commercial loan modification is one form of a loan workout that can be negotiated with a bank for an existing commercial loan that is in default or in danger of defaulting. Specifically, it is an addendum to your original loan contract that changes a certain aspect of the contract – usually the rate, terms and/or principle balance, if applicable. The broader term is Commercial Loan Resolution, it is a loan workout that can be either a loan modification, a forbearance agreement, postponement of accruing interest, etc.
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If you are reading this, you are looking to find more information on Commercial Loan Resolutions. Commercial Real Estate loan defaults are at their highest in decades and there will be many more to come in the next few years. The good news is that there is help out there and there are professionals that can help you negotiate the best terms possible for you. However, with all the commercial loan modification companies coming out of the wood works, it makes it difficult to choose which company to go with. The following guidelines will help you to evaluate the companies you may consider using for your Commercial Real Estate loan workout.
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Experience – Experience has certain value but the type and quality of that experience means even more. For example, a lazy and negligent lawyer who has been practicing for 20 years is still a bad lawyer, he just has all those years of bad performance under his belt. The current default rates are at record highs for both residential and commercial loans, therefore no amount of experience could have prepared anyone for what we are currently experiencing. The only thing that really matters is getting results and National Commercial Resolutions has one of the highest success rates of any company out there.
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National Commercial Resolutions now has a blog! Check back for more information. |
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