The problem is that most commercial-mortgage borrowers don’t know the proper way to ask, I don’t think that it’s not the borrowers’ fault, think about it. Did the clients faciliatate their own loan? No, of course not, they use a professional, so it only makes sense to do the same in attempting to modify. I say this because Commercial is very different than Residential, with Residential you have these huge conglomerates called Fannie Mae and Freddie Mac that basically own all the paper on conforming loans. Commercial loans on the other hand are usually the banks own money.
The point I’m tyring to make is the borrower discloses their Personal Financial information, if it is disclosed innacurately I’m going to have a hard time trying to convince the underwriters at the bank how and why your financials are unusually different from when you applied 4 months ago. If someone sued you would you represent yourself in court? If you have very complex financials would you file your own taxes? No, lawyers speak a different landguage and certain CPA’s understand Tax Strategy and know how to disclsoe income and expense information in a manner that allows their clients to pay the least amount of money, We do the same thing.
Obtaining a loan modification can be difficult, especially if the loan is what’s known as a commercial mortgage-backed securities loan, or CMBS loan. CMBS loans are often tricky to modify, because the original issuer of the loan is no longer involved and the beneficiaries are individual and institutional investors, often scattered across the globe.
A CMBS loan, usually in default, is regularly managed by a loss-mitigation specialist known as a special servicer. It’s easy for commercial-property owners to get discouraged when trying to obtain a loan modification from a special servicer, because the negotiation process can resemble talking to a wall.
With my experience in the commercial finance industry, special servicers were essentially limited to accepting or rejecting the borrower’s offer. They usually are prohibited from making a counteroffer or disclose why a borrower’s offer was rejected. As a result, I’ve experienced first hand that borrowers have often given up after a couple of rejected offers.
CMBS loans, which total about $36.5 billion, was issued in Arizona with little improvement in the value of commercial real estate, Arizona could be headed for more serious problems economically if a high percentage of CMBS loan defaults end with foreclosure. Currently, about $3.5 billion of CMBS loans in AZ have already filed Notice of Defaults.
The value of outstanding CMBS loans is $800 billion Nationwide. More than 60 percent of those loans were issued between 2005 and 2007, when commercial real estate was heavily overvalued. Most commercial-mortgage loans don’t face a serious risk of foreclosure until they reach maturity, usually after 10 years… usually. The meaning behind this is that foreclosures seen so far among commercial properties barely scratch the surface of the problem.
There is no question in my mind that the worst has yet to come in Commercial Real Estate. The situation isn’t hopeless, Capital Mitigation Group specializes, for a fee, the structuring of a loan-modification proposal based on deals special servicers have accepted in the past.
While Capital Mitigation Group has a business model that is relatively unique, it isn’t the only company in this business that has successfully prevented a CMBS loan from being wiped out by foreclosure.
A landmark case decided in 2010, a Maricopa County Superior Court judge held that a receiving commercial investment company could sell seven Arizona apartment complexes formerly owned by the by a “investor group” based in California, without requiring the assigned special servicer to foreclose on the properties.
An “investor group” financed the purchase of the seven apartment properties with a $164.5 million CMBS loan in 2007 and subsequently defaulted on the loan. By allowing a new buyer to assume the CMBS loan, rather than wiping out the debt and forcing the buyer to pay cash, the court protected bond holders connected with the loan and prevented the seven apartment properties from losing at least $50 million in combined value, so I’ve read.
Since Capital Mitigation Group has opened millions in CMBS loan restructures / modifications and are using a variety of methods which include term extensions, discounted payoffs, interest-rate reductions, forbearance agreements and extension of adjustable rates to fixed rates for underwater properties.
Unless more commercial-building owners can work out deals with their lenders to avoid foreclosure, the real-estate and lending crises are likely to continue for years to come and Capital Mitigaiton Group is a provider that ensures success.
Investment funds and pension plans, too, will suffer if more CMBS loans cannot be modified. Because of its early successes with obtaining commercial loan modifications, Capital Mitigaiton Group has expanded. Capital Mitigation Group intends on expanding and being very selected in candidates. CMG also offers, for a fee, the opportunity to be a Net Branch and leverage and use ALL of our Marketing Platforms, Customer Database Management / CRM, Forms and Tools, and a variety of very useful training.
For more information send me a message.
MICHAEL MCDEVITT 