“Loss mitigation commercial” has become a new buzz word in the world of financing but why is this? Has this problem not always existed in one form or another? Why is now different? Are we really just robbing Peter to pay Paul? No, says the FDIC and the rest of the FFIEC (Federal Financial Institutions Examinations Council). It is a prudent strategy for banks and the overall economy. They do not want the banks not to cut off their nose to spite their face.
Learning from past decisions stretching back past the Great Depression and to Reconstruction after the War of Northern Aggression, the government is seeing the symbiotic relationships between companies, workers and banks and why loss mitigation commercial is so crucial, it is a way of preventing commercial short sales. None can exist with out the other and at this moment lenders of money for commercial loans are keeping it together. Let’s look at our precarious position right now.
Right now, a number of banks are deep into CRE (Commercial Real Estate) loans. If they call the loan they have to shut down a plant meaning less jobs. Because there are less jobs the value of the land and assets goes down. The bank is now stuck with real estate. Also, there homeowners are starting to default because they lost their job when the plant closed. What the need is industrial loan modifications so that the bank does not own a plant and 20 houses in a market with no jobs so they have to sell at a loss.
Granted, that is a myopic view but it does show the enter woven fabric of our economy. It is for that reason that loss mitigation commercial is so crucial to our long term recovery.
Other articles you might like;
- The Commercial Financial Crisis
- The New and Improved Commercial Modification Blog!
- Get A Commercial Loan Workout To Help You Now
- When Choosing Loan Modification Foreclosure Can Be Dodged
- Use The Short Payoff Strategy To Your Advantage
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