loan modification
Importance of the Commercial Loan Review in Loan Modification
The commercial loan review has two contrasting meanings for the lender and the borrower when they are attempting to reach an agreement on loan modification. The loan workout is supported by financial regulators, such as the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, because they realize that this kind of deal will be beneficial for both parties.
The bank regulators believe that the situations of many of the troubled commercial borrowers are only temporary and that they really want to continue with the payments but the circumstances are preventing them from doing it. They also know that providing the borrowers with some room for recovery would be advantageous for the banks and the economy in the long run. Naturally, the regulators also pointed out that even if they have expressed their support for restructuring the loans, this does not mean that the lenders will disregard the basic rules for assessing risks and approve all applications. It would not benefit anyone if a commercial loan modification is provided to a business that has lost its viability and when the foreclosure is unavoidable.
In simple terms, what the financial regulators are proposing is that the lenders should be more creative when searching for possible ways to assist the businesses in avoiding foreclosure. This is where the commercial loan review becomes important. This is the method of appraising the capability of the property owner to come up with the modified mortgage payments. The issues that have to be taken into account by the banks include the cash flow of the business or individual, the payment record, the market situation, and the presence of potential guarantors for the property owner. In simple terms, the commercial loan review that the lender will perform will play an important role in the approval of the workout.
However, for the borrower, the commercial loan review is something that is usually done by a loss mitigation expert or consultant. This activity will focus on the original loan agreement because experts have discovered that 80 percent of the loans that were released for commercial properties during the prosperous years in real estate contained flaws. These flaws are transgressions against the laws and regulations that have been put in place to protect the borrowers from the abusive practices of some lenders. The point is that the corresponding penalties for these flaws are usually severe, such as requiring the lender to return to the property owner all interests that have been paid since the beginning of the mortgage. Moreover, the bank would not be able to apply any of the provisions contained in the original agreement and this includes repossession or foreclosure of the property. Thus, this could be a powerful tool for the borrower in the event that such violations are actually found in the documents.
If such violations are found, this will also assist the property owner even if the process of foreclosure has already been initiated. The court will freeze the proceedings until such time that a decision has been made regarding these accusations. The commercial loan review will indeed provide the borrower with a strong weapon when negotiating with the bank for a loan restructuring.
Read more at http://www.commercial-modification.com
How to get a Loan Modification Approved
Is it possible to do a loan modification through a different lender than what I have?
I have Citimortgage and they are not moving forward with my loan modification for the “Making Home Afrodable” program that my loan qualifies for through the government. They’ve been stalling for months and I’m about to go bust. Can I for example take my loan to Wells Fargo or another lender for them to do it?
NOPE
Citi has your mortgage and only they can modify it. A modification says you are keeping your loan and ONLY changing the interest rate, which also slightly lowers your payment.
To go elsewhere you are doing a refi.
Call them, keep calling, ask if there is anything else you need to submit, ask if you can talk to anyone else if you’re not getting anywhere.