A workout commercial loan can help you avoid foreclosure

Owners of commercial properties like malls, hotels, restaurants, resorts, warehouses etc. are facing a tough time in repayment of their commercial loans. The difficult financial scenario of the past few years has eroded the value of a lot of properties, which in turn, has increased the number of foreclosed commercial loans. A lot of commercial property owners are hence looking for workout commercial loan opportunities, which will go a long way in retaining ownership of the property and avoiding foreclosure. As part of the workout commercial loan process, the borrower and the lender re-negotiate the terms of the commercial loan, so that the payment terms become easier for the borrower and he/she can avoid bankruptcy or foreclosure. A commercial loan workout is hence extremely helpful to loan owners who want to avoid defaults or foreclosures. Renegotiations to avoid a foreclosed commercial loan may include a lower interest rate, elongating the loan period and other special payment agreements as agreed mutually by the lender and the borrower. A lot of special servicers are offering their expertise as a go-between for both parties during negotiation rounds.

A workout commercial loan not only ensures that the borrower can continue with the payments, it also ensures that the loan doesn't go in the distressed category. A workout commercial loan is also useful to banks, financial institutions and other lenders who want to reduce the number of foreclosed commercial loans in their books at the end of the year. Such institutions are now offering commercial loan workout opportunities which offer the borrowers a chance to prevent defaults in payments or foreclosures. If you are looking for a workout commercial loan, take the help of a special servicer, who will not only know the whole process in detail, but will also help in the negotiation procedure.

Steps to follow if you want a workout commercial loan

Workout commercial loan opportunities are becoming a popular choice for both borrowers and lenders who have considered the impact of the potential delinquencies in the current financial scenario. Terms of a workout commercial loan give banks and financial institutions a chance to lower the number of foreclosed commercial loans in their books. At the same time, such a setup offers the borrower the chance to retain ownership of the property or business for which they had taken the loan in the first place. Change in the terms of a commercial loan as part of a workout commercial loan may be anything from special payment agreements, a low interest rate to an extension of the deadline for payment, as per the agreement reached by both parties.

The main purpose of a workout commercial loan is to make the terms and conditions as beneficial to the borrower and lender concerned. A crucial factor in determining the conditions of the workout is the financial condition of the loan owner. The borrower takes into consideration the current cash flow of the borrower in order to agree to any terms of the workout commercial loan. This and a lot other factors need to be considered in order to avoid a foreclosed commercial loan.

A workout commercial loan has a complicated and lengthy process to be followed. Consider these steps if you want to be well prepared to avoid a foreclosed commercial loan:

• If you are a loan owner looking for a workout commercial loan, the first step you need to be prepared for is the paperwork. Documents required may be detailed papers related to the loan and its terms, your financial details, loan maturity details etc. Such papers will help determine if a workout commercial loan can be agreed upon. Without this documentation, the process cannot start. An expert like a special servicer can help you with such documents.
• As a loan owner, you need to submit a financial snapshot of your condition to the lender before you can submit the workout commercial loan. This will enable the lending bank determine if you will be able to fulfill the conditions of the deal. Again, a special servicer will come handy when you prepare this financial snapshot. After this is done, the paperwork is forwarded to a workout commercial loan specialist.
• Next comes negotiation. A workout specialist analyses your paperwork and then takes a call on which terms to change in the commercial loan. You, along with your special servicer should try to make the final terms as favorable to you as possible so you can avoid a foreclosed commercial loan. Negotiations may stretch out to a long time, so have patience when you are dealing with the bank or financial institution.
• Once the conditions are formalized, you will get the changed conditions of the loan and other details of the workout commercial loan for review. Check the documents carefully to include all the conditions discussed. After you sign this new document, your workout commercial loan will be considered final and successful.

Want to avoid a foreclosed commercial loan? Consider a workout commercial loan

Commercial property and commercial loan owners are increasingly facing a difficult scenario with the economy on the verge of a recovery. The number of foreclosed commercial loans may probably be the highest in the past few years than it has been since decades. If you are amongst the commercial loan owners looking for a workout commercial loan, you are not alone. Banks and other financial institutions are offering an increasing number of loan owners an opportunity or avoid foreclosure through workout commercial loans. A workout commercial loan can be a huge help if you want to avoid a foreclosed commercial loan on your hand.

A workout commercial loan opportunity may include various options agreed upon during the renegotiations between the loan owner and lender. Options which are possible to be worked out can be relief in the capital amount, reduction of interest rates, duration extension and liberal payment terms to avoid a foreclosed commercial loan. Commercial lenders offer to renegotiate the terms of the loan in order to avoid delinquent commercial loans on their books of accounts at the end of the financial year. The renegotiation also helps the loan owner to stay away from a foreclosed commercial loan. A workout commercial loan is hence a win-win situation for both the loan owner and the lender.

Commercial loan workouts can be possible for property loan owners such as malls, warehouses, industrial property etc. If you are a commercial property owner looking to avoid a delinquent commercial loan or foreclosed commercial loan, you can try to set up a meeting with your bank or lending institution about negotiation possibilities.

An expert like a special servicer can help a lot if you are looking for a commercial loan workout. Negotiating with the lenders is a tough process, for which you need a seasoned professional. The special servicer can offer you advise as well as help you in the negotiation process. Hiring a good professional will help in making sure that your workout commercial loan is successful and you avoid a foreclosed commercial loan.

Have a distressed property? Think of a workout commercial loan

There have been many modifications in the home owners loan market in the recent troubled economic times. The distressed property market has been slow to catch on to workout commercial loan opportunities. Even with the foreclosure rates rising to an all-time high, some distressed property owners don't seem to realize that they have the option of workout commercial loans. A commercial loan workout basically gives the lender as well as the borrower an opportunity to prevent defaults in payments of the commercial loan. A distressed commercial loan advisory service provider specializes in working with the borrower to negotiate and analyze the distressed commercial loan and spot workout commercial loan opportunities.

Workout Commercial Loans

The owner of a distressed commercial property can try to renegotiate the terms and conditions of the commercial loan in order to retain control of the property as well as prevent defaults in payments. This is known as a commercial loan workout. The workout commercial loan process entails altering the terms and conditions of the original loan, so that the borrower can prevent default in payment. The alteration may be anything from a lower interest rate, adjustment in the amount of monthly payments to a lower principal amount. A distressed commercial loan advisory service provider can help in detailing the terms and conditions of such a workout. The main aim of a workout commercial loan is to make the terms and conditions favorable to both the borrower and the lender. The adjustments in terms and conditions of the original loan help the borrower prevent defaults in payments and also ensure that the lender can avoid writing off the complete amount of the loan as a loss.

Distressed Commercial Loan Advisory Services

Many distressed property owners find themselves in a situation where they are unable to pay the commercial loan, which puts them into the distressed commercial loan category. There are some distressed commercial loan advisory services which can help out in such a situation. Such service providers help the borrower in analyzing the situation, identifying favorable terms of the workout commercial loan and negotiating the terms with the lender. Distressed commercial loan advisory services can be a huge help for property owners who have not faced the complications of a workout commercial loan before. The distressed loan owners can sit with their distressed commercial loan advisory service provider to discuss their exact situation and to forge a pathway for the negotiation process.

An expert for distressed commercial loan advisory services can provide further help.

Workout commercial loans: A means to restructuring a distressed commercial loan

The past year has been a tough one for the commercial sector, with the number of distressed commercial loans on he rise. Banks and financial institutions which are looking to minimize their losses are offering workout commercial loan deals to prevent loan owners from defaulting. As part of such a deal, the terms of the loan are restructured so that the borrower can avoid foreclosure or bankruptcy and the lender gets a chance to recover a distressed commercial loan. The conditions for the workout commercial loan may include a lower interest rate, elongating the loan period and other special payment agreements as agreed mutually by the lender and the borrower. Commercial loan workouts are hence considered beneficial for both parties involved. Distressed commercial loan advisory service providers or special servicers can help borrower negotiate the terms of the deal.

If you are looking for a workout commercial loan, it would help to know the process. The following are some general steps which are followed in a commercial loan workout:

Consultation

The first step consists of getting a professional consultation with regards to your situation. There are a lot of professionals for distressed commercial loan advisory services whom you can approach for such a consultation. Some special servicers may also provide you with a free consultation before you hire them. You need to have details related to your loan, property etc. ready so that the professional can undertake an evaluation and determine if you are eligible for a workout commercial loan.

Documentation

The documentation for the workout commercial loan is an important aspect, which needs to be handled with care. The way the paperwork is presented and the details which are provided to the lender help in putting your case forward, so you need to gather all important documents. The company providing distressed commercial loan advisory service can give you a checklist of documents to be submitted. Documents required generally consist of details of the loan, its conditions, property information (if any), personal financial details etc.

Submission of Documents

The workout commercial loan process can start once you submit the documents to the lender. It is important to submit the paperwork to the right person, or you risk having your file stuck for weeks and the process not moving forward. Your distressed commercial loan advisory service provider can assist you in finding the right person at the lender’s end, to whom you can submit your papers.

Negotiation

The final step in the process is that of negotiations between you and the lender. Your distressed commercial loan advisory service provider plays a key role in the negotiations, constantly making counter offers and arguments for getting you a favorable workout commercial loan deal. You can have a meeting with your distressed commercial loan advisory service provider before the negotiations begin so that you can clarify your goals and terms and conditions for the commercial loan workout.

The process for a workout commercial loan is a long one, with a lot of complications. Don’t worry if your distressed commercial loan advisory service provider takes some time in the negotiations; the process will continue until you and the lender can agree on the conditions of the commercial loan workout.

TALF for legacy CMBS & Refinancing of 1700 Pacific, Berkeley First City LP, in the Dallas CBD

The next round of TALF for legacy CMBS took place this week as market participants returned home from the CMSA conference in Washington, D.C.  Probably due to investor focus being diverted into other areas, the subscription amount for this month's program remained muted somewhat with only $1.45 billion in investor requests.  Unless the government chooses to extend the program, TALF for legacy CMBS will only be available for February and March while TALF for new issue CMBS is set to expire at the end of June.  Reading into the recent statements made by senior government officials, the comments seem to reflect the mood that the program for legacy securities has served the purpose of propping up the senior portions of the CMBS capital structure and is not in need of renewal.  For CMBS investors, an investment opportunity may exist as we approach this deadline.  

The lack of financing may cause some security values to decline.  In the property markets, transaction velocity remains a concern but some deals are getting done.  The owner of 1700 Pacific, Berkeley First City LP, in the Dallas CBD was able to refinance their existing mortgage with a new $65 million first mortgage from ING.  For the 1.3 million square foot prominent office property, this amounts to a loan basis of $48.50 per foot.  Regardless of the previous in-place financing for this property or the owner's ability to commit additional capital to the project, first mortgage financing to a $48.50 per square foot level may not be sufficient to aid projects in need of capital where the loan basis is much higher.

CMBS Rally to Start 2010

Investcap Advisors LLC

Much of the activity in the CMBS market to close out 2009 was characterized by thin trading. What was thought to be strong sentiment materialized into a very real rally to start 2010. Many wondered this past week, however, whether we had come too far, too fast. After all with conditions in the property markets poised for another rough year, why would sentiment in CMBS be so positive as mortgages continue to sink deeper under water. Along those lines, servicers seem more willing to bring non-performing mortgages to market through auction sales. This is exactly what the opportunistic investors have been awaiting but time will tell if the bid-ask spread has compressed enough to get deals done. Obviously, this will remain very deal specific and plenty of opportunity will exist over at least the next several years. On a final note, it is now official. Tishman has indicated to the lender (CMBS servicer) that they will not be making their mortgage payment this month on the Stuyvesant Town/Peter Cooper Village project. This should not be a surprise to anyone in the market. If the project were to fail to be worked out, the question becomes who is large enough to step into a buyer's shoes....perhaps a governmental agency? Loan-to-liquidated value estimates for the project remain roughly $160,000 per unit.