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Commercial Loan Modification Scam?

Commercial Loan Modification Scam?

t’s stating the obvious when saying “everyone’s situation is different”, but what’s not obvious to you or your client is whether or not your commercial loan can even be modified. There are several scams out there and very few qualified individuals to actually modify your commercial loan. Every commercial loan modification is different, sometimes it’s illegal for services to modify your commercial loan.

Before any negotiations begin you must first know what covenants and or representations and warranties your servicer or investor is obligated to. Before you can prepare the commercial loan modification or “Recapitilazation Request” you must understand EXACTLY how to communicate with the servicer or the investor and what reasons you must present to them in order for them to approve your request. If you don’t know this information before you present your request the deal is dead and will never get to a committee phase.

There are many factors that determine on what basis a lender will modify a commercial loan and they are all important. Equity position, gross revenues, net operating income, rent roll, bank statements, current payment history, debt coverage ratios and many other factors will need to be presented to your servicer or investor. Not by an attorney who has never completed a commercial loan modification. You need a professional that is in the commercial real estate finance business, one who knows what each servicer or investor needs to see to approve the modification. An experienced real estate investment banker will help you create the right restructuring request so that you set yourself up for the best chance of getting an approval. Every case is different. If your property is not producing any income and you have no personal assets to pledge then your chances of getting an approval is zero.


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