Commercial Loan Modification – Really

The economic crisis has already hit the residential sector hard, but now it is forecast to spill over into commercial mortgages as well. Residential home owners were blessed with many different options to restructure their home mortgages or short-sell their homes due to the recent economic crisis. These options are now available to owners of office buildings, shopping malls, and retail shops, among other commercial properties, by way of a commercial loan modification.

Similar in principle to home mortgage modifications, a commercial loan modification permits the owner to renegotiate the terms and structure of his or her mortgage to prevent the foreclosure of the property. The lender and borrower can work together to restructure or amend the mortgage, based on the original agreement. As in a modification to a home loan, many lenders will also opt to work towards a loan restructuring agreement with the owner, and may decide to reduce or extend the loan terms, the reduction of the mortgage’s interest rates, reduce to interest only payments, past due balance deferment, and even reduction of the outstanding loan balance.

A third-party group of auditors or examiners who come from the lending entity itself will need to review a business property owner’s track record, primary information, and some supporting documentation before approving it for negotiations towards a commercial loan modification. After this, the negotiation process can begin between the owner and lender, with the end goal of a mutually beneficial loan modification that allows the borrower to keep the asset and prevent foreclosure.

Two basic factors contribute to the success of a commercial loan modification: proactive moves by the asset owner and his or her openness to enlisting the help of mortgage modification experts. The first factor is simply good business and common sense – if there are any impending concerns, no matter how small or insignificant, these must be resolved or rectified even before larger problems arise. The owner has to closely examine his or her asset and finances, and start considering the subsequent option to avoid loss of property and business. Choosing a commercial debt professional for any amount of help is always recommended, whether it be for simple debt modification advice or as involved as getting help in renegotiating the terms with the lender. This option will exponentially increase the property owner’s success rate in getting the commercial mortgage modified and keeping the property, as a property owner may not always have the time, focus, or wherewithal to devote towards the betterment of his or her terms of mortgage.

When you talk to a commercial loan modification expert, you have to evaluate the individual or company’s abilities, payout history, and other relevant qualifications. Those that are true professionals often have extensive experience working with all types of lenders and borrowers, including large insurance companies, large chains, and small lending entities.