A commercial loan modification can be obtained for commercial property owners of shopping malls, office buildings, industrial buildings, multi-use buildings, apartment buildings and other commercial properties. If you are interested in obtaining a modification on your current loan, then you must speak to your commercial lender to find out about their different modification programs. The commercial loan modification process can take 45 to 90 days or longer depending on how busy your lender is with other requests. Be sure to get as much information as possible from your lender so that you can send them what is needed the first time. This will save time and avoid delays.
Commercial lenders will offer you a commercial loan modification when your business is generating less income, and you cannot afford your current mortgage payments. A modification gives you a chance to obtain more favorable terms on your current mortgage. There are several options of different modifications that your lender may offer you such as reducing your interest rate, extending your loan term, reducing your principal, delaying your payments or suspending them. Modifications are complex and lenders can be difficult so you may want to hire a modification attorney to help you obtain the best terms for your modification.
What Lenders are Looking For?
Commercial lenders want to make sure that you have borrowing strength, sufficient cash flow and they are concerned about your vacancy factors. You need to prove to them that you are credit worthy and responsible and that your business financial hardships are only temporary in order for them to approve your modification. This involves delivering an extensive amount of financial paperwork to your lender for their review such as:
- Your net operating income
- Current and past years rent rolls
- Updated income and expense statement
- Information regarding your largest tenants
Once you have submitted the required documentation, you should keep following up with your lender to determine the status of your application. Call at least once a week. Be proactive and patient. The process can be frustrating and time consuming. Many property owners choose to have an attorney negotiate the modification on their behalf because they don’t have the expertise or knowledge and are concerned that they may make a mistake. It is better to have the security of knowing you have an experienced modification attorney looking out for your best interests.
Hire an Attorney
Negotiating a commercial modification is very complex and requires skills and experience that a modification attorney possesses. The attorney is an expert at negotiating modifications, and has established relationships with the loss mitigation departments of lenders. You will obtain better results if you have an attorney representing you.
