Mortgage modification is considered a commercial loss mitigation procedure. Modification is by no means a general avenue to take toward refinancing your loan, getting a better interest rate on your commercial property’s debt, or to even save any money, ultimately. Commercial loss mitigation implies that the borrower is not able to meet the terms of the debt that the mortgagor and the mortgagee have already set.
The commercial loan workout with the bank will invariably require a commercial loan audit of the commercial property’s books; meaning, the business plans, lease agreements, tenant affidavits and other relevant docs will be requested by the bank in order to accurately appraise and assess the ultimate viability of the property. Because lease rates can change almost weekly, the commercial lease market can dip, effecting commercial property revenues, while the repayment terms of the mortgage are left in their original state, with terms reflecting a more vibrant time in the market. The difference can make for the margin that leaves a property unprofitable and unable to make mortgage payments. Should a bank deem your property a viable business in the long run, in order to ease the current riskiness of your situation, the bank may ask for you to further collateralize the loan as a part of the restructure commercial real estate loans attempt’s negotiations. What’s critical to your bargaining effectiveness during the commercial loan renegotiation is confidence, and a way for you to keep your confidence during this trying time is to realize that the bank has a vested interest in seeing you succeed.
