WHICH COMMERCIAL LOANS

QUALIFY FOR MODIFICATION?

 Since 2008 Trillions of Commercial Loans have and are
reaching maturity, falling into default or even
foreclosure.
 Saving these properties from becoming bank owned is
critical to bank survival and long term growth.
 Most commercial property owners don't know if their
loan qualifies for modification or now to navigate the
process correctly.
QUALIFYING LOANS:

1) Loans Maturing in the next 12 months.

2) Loans in "Distress" meaning - 1 or more months
behind on payments but not yet in foreclosure
3) Loans in Default and moving towards foreclosure
4) Loans in Foreclosure now but not in Receivership.
5) Loans Placed with a Receiver within the last 60 days.
RESTRUCTURING EXISTING COMMERCIAL
LOANS CAN BENEFIT YOUR PROPERTY IN
ONE OR MORE WAYS.
* Reduction in Interest Rate
* Increased Cash Flow
* Stop Receivership
* End Foreclosure Process
* Conversion To Interest Only
* 2 - 3 yr Extension
* Lengthening of Amortization Schedule
* Reduction or Elimination of Late Fees / Penalties
* Extension of Maturity Date
 The Following represents a Real Hotel Mod Case Study
Recently Completed
 Property Type = Hotel (2) Wyndahm / Comfort Inn
State(s) = CA, TX
Mtg Balance = 6.5m and 5.3m total = 11.8 million
Loan 1 = Portfolio with Zions Bank 1 month in arrears
Loan 2 = CMBS (Commercial Mortgage Backed
Security) 2 months in arrears
DCR = approx .85 (cash flow down from 200k per
month to 70k
 LTV = 150% +
Loans Matured in July 2010
 THE WORK OUT FACTS FOR THIS DEAL
WERE AS FOLLOWS:

 Workout = 3yr extension @ interest only payment with

escrow.
This cut the monthly payment in half to about 30k per month.
All Fees and Late Payments wrapped back into principle
Client paid 1% or $118,000.00 (50/50). ½ Up front with 2nd
½ Escrowed.
Time to completion for Portfolio loan was 6 weeks
Time to completion for CMBS was 11 weeks.
 This is just one of dozens of cases done in the last 30 days
 Restructuring Commercial Loans Helps Borrowers Avoid
Foreclosure and Eliminate Many Fees while Lowering Their
Monthly Payment
The Conditions Could Not Be Better to Modify Your
Loan
1) Banks hold more than 2 trillion in loans coming due
by the end of 2012 .
2) Property Owners Cannot refinance because of current
conditions.
3) The IRS relaxed Tax Regs on CMBS Restructuring
Rules
 The Cost of A Mod vs. Refinance is About 1/3 to the
borrower as there is No Closing, No Appraisal,
Environmental or Title Work to be done.
 IT IS CRITICAL To Understand How to Package and
Present This Type of Request.
 Many Borrowers call the lender asking for an extension
but are turned down because they do Not Know How to
Properly Execute a Commercial Mod.
 Every Major Bank and Commercial Loan Servicer is
Now Modifying Commercial Mortgage Loans whether
they are on balance sheet or CMBS. The IRS Tax
Regulation change opened the flood gates.