Commercial Mortgage Litigation

By: Timothy McFarlin | Published: July 9th, 2010 | Category: Mortgage Litigation

A mortgage is a loan issued for the purchase of real property that is secured by the property purchased.  Should a person be unable to make their loan payments, the lender may choose to initiate a foreclosure and repossession of the property.  For the person who invests in commercial property, the foreclosure of the property can greatly affect the owner’s income potential, especially when the owner has every intention of paying off their debts.

What many lenders fail to realize is that a majority of their borrowers want to be able to pay off what they owe, they just need a little more time and a little lower monthly payments to do it.  Unfortunately, many lenders have a sort of “all or nothing” attitude when it comes to loan payments, since anything less than the monthly minimum payment could result in a foreclosure process.  In fact, even if a person under pays their monthly mortgage payment by a single dollar, the lender would be allowed to initiate a foreclosure process.  Granted, most lenders won’t do this, and many will simply add the missing amount to the principal where it can be taxed with interest, but the fact remains that failure to pay all the entire minimum monthly balance is grounds for foreclosure, since the borrower is failing to live up to their promise to pay as expressed in the mortgage contract.

When a borrower is unable to make their minimum monthly payments, various options exist for the borrower to get some assistance from their lender through programs like loan modification.  In order to be awarded a loan modification, the borrower and the lender must agree on modified loan terms.  When the two parties cannot reach an agreement, commercial mortgage litigation offers one final option.

Litigation allows the two parties to a dispute to present their arguments to a court. Commercial mortgage litigation is specifically designed to allow the two parties to a dispute involving a commercial mortgage contract to reach a final conclusion on the terms of the contract and what terms (if any) should be modified on behalf of the borrower.  The decision of the court is final and the lender must comply with the judgment of the court immediately.  This means that a ruling in favor of the borrower would require any mandated modification terms to take effect immediately.  Likewise, any judgments against the borrower would also take effect immediately, which means that the lender could initiate the foreclosure process as soon as a judge rules in their favor.

In order to avoid a negative ruling, borrowers are urged to hire an experienced foreclosure attorney in their area with experience in commercial mortgage litigation.  An experienced attorney will be able to review the facts of the borrower’s case to ensure that a strong case exists and to ensure that any and all relevant evidence is presented to the court that can support the borrower’s case.

Many individuals who attempt to represent themselves in court will unknowingly hurt their own cause by presenting evidence that does not help their case or failing to present relevant evidence in the appropriate manner.  Court rooms are places of procedure, and when a procedure is not followed, a borrower can ruin their last chance to save their property.

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