| The owner of a commercial property, such as a | | | | the commercial real estate market, the lender also |
| shopping center, strip mall, apartment complex, office | | | | avoids being stuck with assets that are very difficult to |
| building and multi-tenant building, can collaborate with | | | | sell if a commercial loan modification is allowed. |
| the bank or lender for a possible commercial loan | | | | The lender utilizes the commercial loan review to |
| modification. This adjustment to the commercial loan | | | | ensure that the business has the capacity to provide |
| may result into the reduction of the amount that is due, | | | | for the mortgage payments in case the adjustments |
| the temporary payment of interests only, the extension | | | | are allowed. Some of the factors that the bank or |
| of the duration of the loan, or a decrease in the | | | | lender will look into during the procedure to determine |
| interest rates. However, before the talks on possible | | | | the creditworthiness of the commercial property |
| modifications to the terms of the loan agreement can | | | | owner include the trend in the cash flow of the |
| be held, the lender has to conduct a commercial loan | | | | business, the payment history, market conditions, and |
| review. This review will include the analysis of the | | | | the presence of guarantors. |
| information regarding the borrower and the different | | | | From the point of view of the borrower, the |
| documents. | | | | commercial loan review process is quite different. |
| The commercial loan review will involve both the | | | | Loss mitigation attorneys and experts usually help the |
| borrower and the lender and is necessary before a | | | | property owner in this procedure by carefully |
| commercial loan modification could be agreed upon by | | | | scrutinizing the various details of the original loan |
| both parties. It should be noted that the financial | | | | agreement. The reason for this is that many |
| regulators are recommending loan workouts because | | | | agreements that were made during the times when |
| they realize that most of the borrowers do not | | | | commercial real estate was booming contained flaws |
| necessarily want to default on their loans but have | | | | or violations of laws and regulations that were created |
| only temporarily lost their abilities to come up with the | | | | to protect the rights of the borrowers. If such |
| originally agreed upon payments as a result of the | | | | violations are discovered in the loan contracts, the |
| economic situation. A number of the commercial | | | | lender would not be able to enforce all of the |
| property owners only need a breather to recover | | | | provisions found in the agreement, and this includes |
| from their present financial conditions while others may | | | | foreclosure. The lender may even be required to |
| need a permanent change to the terms of the loan. | | | | return to the borrower the interests that have been |
| The loan workout will be advantageous to the | | | | paid from the beginning of the loan. Therefore, the |
| borrower because it will forestall the repossession or | | | | commercial loan review can provide the borrower with |
| foreclosure of the property. It will benefit the lender | | | | powerful negotiation tools that can hasten the lender's |
| because the expenses required a foreclosure are | | | | approval of the commercial loan modification |
| avoided and the payments will still be made by the | | | | application. |
| borrower albeit at lesser amounts. During the crisis in | | | | |