Tx Real Estate

The Commercial Loan Restructuring Process

Commercial loan restructuring is today’s answer for commercial property owners saddled with yesterday’s miscalculations. When faced with the prospect of foreclosure it can, more often than not, be the best solution. But, the process is rigorous, labor intensive and requires people with the tenacity, skill and experience to deal with banks, lawyers and all sorts or real estate professionals. In short, if you are a commercial property owner in the pre-foreclosure stage, or know you are heading into turbulent times, your best bet is to seek out a professional loan restructuring firm a (commercial loan mitigation firm) and find out what they can offer you. While there are costs involved to hire such a firm, typically the benefits of using one far outweigh the costs incurred.

The goal of a restructure is to change the terms of the original agreement to terms that lend themselves to the property owner’s ultimate success with his investment property venture. This is accomplished through careful negotiations, meticulous business planning and a comprehensive, precise presentation package. If done correctly, the lender will be persuaded to grant the property owner a reduction of the outstanding balance, lowered interest rates, loan extensions or other modifications.

The property owner is advised to hire a commercial loan restructuring firm to review the mortgage documents and the financial condition of the business (or property) to determine if a modification is feasible.

The next step of the process is putting together a comprehensive and cohesive business plan that actually will enable the property owner to get his business back in order while alleviating him of untenable mortgage payments. This step should be strictly be left up to experienced professionals to put together. Usually this process is done by a team comprised of MBA’s, Attorneys and Real Estate Professionals.

Once the property owner and commercial mortgage restructuring firm are in accord on the business plan, the next step is presenting it properly to the lender.

After the property owner’s dilemma and it’s proposed solution has been communicated to the lender (bank), the lender (special servicer) will review the proposal and based on the property owner’s current financial situation, payment record and other factors, will decide whether to proceed with a modification or turn down the proposal.

Commercial loan modification professionals will give advice and act as facilitators or negotiators for the borrower during the process. The best loan restructuring firms typically will do all the work and negotiation while communicating what is happening to the property owner through each step of the process.