Commercial Modification » Commercial Real Estate Lenders

Effective Loan Modification – Strip Mall

CLR Staff — Mon, 21 Dec 2009 18:35:27 +0000

A strip mall loan modification can be of benefit to both a borrower in distress and his or her lender. Commercial loan modification is seen as a viable solution to distressed borrowers who own strip malls. As the economy is still in recession, affected areas may experience a rise in commercial property foreclosure. This may not be healthy for the economy as it may cripple cash flow. In order to help in the improvement of cash flow, there is a need for lenders to work with borrowers and come up with loan terms amendments. By amending the terms of a loan, a loan can become affordable. As long as a borrower can afford to make monthly payments, future foreclosures can be minimized. A loan modification strip mall can help both lender and borrower recover from the dilemma caused by the low economic state.

Financial experts are already making moves to encourage lenders to restructure commercial real estate loans as it may be beneficial for the economy. As long as a loan modification strip mall becomes successful, a borrower can recover and be able to make monthly payments. This, in turn, will help create a healthy cash flow. A loan renegotiation can help both lenders and borrowers alike. By having a successful negotiation with the help of a commercial loan modification professional, a borrower can be rewarded with lower interest rates and reduced monthly payments.

As long as a borrower is qualified, a loan modification strip mall can be of benefit.

Technorati Tags: commercial loan, commercial loan modification, Commercial Loan Modification Professional, commercial loans, Commercial Real Estate Lenders

Commercial Real Estate Lenders Asked to Help Borrowers

CLR Staff — Wed, 18 Nov 2009 06:07:17 +0000

The Federal Financial Institutions Examination Council has issued a suggestion that commercial real estate lenders, such as banks, should collaborate with the borrowers to find ways to modify their loans to prevent foreclosure. The regulators, including the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, are trying to encourage banks by declaring that they would not take it against them if the market value of the commercial property is lower than the unpaid loan.

The agencies also pointed out that as long as the commercial real estate lenders conduct a comprehensive review of the capability of the borrowers to repay the loan, they would not criticize them for coming out with such loan workout deals.

The guidance from the bank regulators is in response to the observation that the commercial real estate industry has begun to show signs of an impending crisis. A study by the FDIC for the second quarter of 2009 has shown that the number of loans used for real estate construction and development that are delayed in their payments by at least three months has increased by 16.6 percent.

However, the regulators clarified that this does not mean that the lenders will be careless in their approval of the loan modification applications. They pointed out that banks should always follow approved underwriting practices and make sure that they properly identify risks.

Meanwhile, this may be good news for commercial property owners who are worried about the threat of foreclosures. Perhaps, what is needed is for them to approach their lenders to find out if a loan workout is possible.

Technorati Tags: Commercial Real Estate Lenders, Commercial Real Estate Refinancing

Commercial Real Estate Lenders Starting to Feel the Effects of the Impending Commercial Loans Crisis

CLR Staff — Wed, 11 Nov 2009 07:43:34 +0000

In view of the rapidly dropping market values of commercial properties, such as shopping centers, strip malls, warehouses, apartment buildings, hotels and office buildings, experts have been warning that the next crisis would be in commercial real estate loans. For one, record-high vacancy rates have been hurting the cash flow of landlords, making it harder for them to come up with the monthly mortgage payments. On top of that, tenants are becoming bolder in asking for lower rents in view of the rising number of vacancies. Moreover, some tenants are simply leaving without paying their rent after filing for bankruptcy.

The losses resulting from troubled commercial real estate loans are starting to be felt by the banks and other lenders. It has been observed that a number of the 106 banks that had shut down their operations this year that were under the supervision of the Federal Deposit Insurance Corp. (FDIC) had substantial losses in such loans. Meanwhile, one of the biggest real estate lenders is expected to file for bankruptcy. This impending demise of a such a large lender is expected to worsen worries that the losses in commercial real estate loan will cause an avalanche of write-downs for the big financial firms. There are also fears that the capability of the FDIC to cover for the deposits of failed banks might no longer suffice in the future.

In an attempt to counter the imminent crisis, banking regulators have been urging banks and other lenders to sit down with the borrowers and try to discover a solution to the problem, such as a loan modification. The regulators are pointing out that judicious adjustments to the loan terms may be advantageous for lender and borrower. However, the regulators also warned the banks that it is still vital to look into the creditworthiness of the borrower and to ensure that risks are minimized in their credit portfolios.

Technorati Tags: commercial loan modification, Commercial Real Estate Lenders