For the owner of an apartment building who is behind in the mortgage payments, consultation with a commercial loan modification professional may be necessary. This is because the process of preparing and negotiating is complicated and may take a long time. The first thing that the professional will do is to sit down with the owner to ask several questions to get the total picture of the financial situation and the exact nature of the commercial loan. He may also try to find out if the lender had violated any law or regulation that would prevent him from enforcing the provisions of the agreement in case of a default.
After conducting the research and analysis, the commercial loan modification professional will assess the qualifications of the owner. He will then approach the commercial lender, such as a bank, to ensure that they are willing to sit down and negotiate with the borrower for a possible restructuring of the loan. The lender may be motivated to negotiate to avoid the possibility of initiating foreclosure proceedings, which are usually costly to pursue and require much effort. There is also the possibility that the lender will not be able to sell the property and convert it into the liquid cash, especially during an economic slowdown. If this happens, the property will be included in the Real Estate Owned (REO) list of the lender, waiting for the time when an interested buyer will make an offer, which may take a long time to happen.
The entire process may last from one to three months but it could last up to six months if the lender and borrower find it hard to reach a compromise. This is because the lender has to ensure that the borrower is not just trying to delay an inevitable foreclosure and can really abide by the terms of the modified loan.
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- Use The Short Payoff Strategy To Your Advantage
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