Commercial Property Short Sale Packaging & Negotiation

Commercial Property Short Sale is Here

Up until recently, there has not been any wway for a commercial property owner to qualify for a short sale on the commercial property.  Now their is! It is estimated that over a trillion dollars  in commercial property will be in financial peril of some sort.  These property owners have the usual and customary adjustable mortgages on their commercial properties.  They are usually 3, 5 , 7 and/or 10 year adjustable mortgages.  This causes a huge problem since so many commercial properties will be coming to term on the notes.  This means that the property owner must re-cast the loan into a new adjustable mortgage accepted by the current lender or go find a new lender that is willing to take on a new loan.

The problem is that lenders are not lending.  Commercial lender are carring huge debt right now and taking back lots of non-performing assets in the form of commercial foreclosures.  Every time a commercial property goes into foreclosure, the lender has to sell the property or keep it on their books.  If they keep it on their books, they have to reduce their lending ability by up to 5 times the cash value of the commercial property that they placed on in their portfolio.  This presents a huge problem.

It is estimated that commercial foreclosures are going to excellerate to huge levels in the next 36 months.  Something has to been done to shore up the commercial market and stablize it.   Two of the answers will be commercial short sales and commercial loan modifications.

Commercial loan modifications processing and negotiation companies are spring up to assist property owners in the negotiation, packaging and delivery of modification pacakges. Many lenders will have no choice but to negotiate new terms and conditions on their present bundle of less performing commercial loans.  If they don't, they will have not choice but to take back the properties and place them into foreclosure.  This is very costly since the bank would be responsible for the taxes, monthly maintenance costs and the costs of sell to get a realtor to sell the property over time.  Plus,  the foreclosed property becomes a lilibility instead of an asset on the banks book. This does not make the investors happy.

I have recently found a commercial processing and negotiating company that has successfully negotiated over 70 commerical loan modifications for their clients.  Thats a lot of commecial loan modification approvals in only 6-9 months.  Completing a commercial loan modification is a lot different that the traditional residential loan modification.  You cannot pull the wool over the eyes of savy business people.  This is a good thing.   The fact is, a lot needs to be done to help the commercial property owners. They are hurting greatly since the down turn in the economy started. 

If a commercial loan modification is not successful, then, the best "next" choice is a short sale of that commercial property. The process of short saling a commercial property is similar to that of a residential property. The major difference is that a lot more documentation is needs  and the owner still has to proove that they have a hard ship and also that the property rents are not suffencient to pay for the costs and mortgage on a monthly baisis.  Putting together a short sale package can detail all the proof needed to get a short sale approved as compared to the lesser option of foreclosure.

If you are in one of the situtations as described above, you can contant us to determine whch remedy serves you best.

Author: Steve Linnin

Real Estate Broker and Mortgage Lending Professional - 25 Yrs.
TheShortSaleDepartment.com

909-895-4074