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The Commercial Loan Modification Process

The commercial loan modification process can be quite lengthy, but for no other reason than lenders seem to drag their feet with making decisions about a person’s loan status.

In most cases, the commercial loan modification process will follow a usual order, which is:

–The borrower realizes he or she is in need of assistance and contacts their lender for information on the commercial loan modification process.

–The borrower will fill out necessary application information and will submit requested financial documents, including but not limited to: income and loss statements, bank statements, and a hardship letter.

–The lender will receive the submitted information and will use it as a means to determine the borrower’s eligibility for a loan modification and to what extent the loan should be modified.

–The lender either approves or denies the application.  If the application is denied, the borrower can pursue other options to avoid foreclosure or can take their lender to court to force them to modify.  If the application is approved, the lender will present loan modification terms to the borrower for their approval.  If the borrower likes the terms, he or she can agree, if not, he or she can make a counter offer to pursue better terms.

–If the lender is willing to negotiate, the borrower may be able to win themselves a much more attractive modification than the one offered by the lender.  If the lender is unwilling to negotiate, the borrower can accept the less than desirable terms or can take the lender to court to force better terms.

All in all, the whole process is rather simple.  Actually, the whole process seems rather simple, at least it seems that way in theory.  A process that has just been broken down into not more than five distinct steps can take months and months to complete.  In many circumstances, business owners will have to submit several copies of the same information because the various departments of the lending institution either fail to communicate or fail to maintain a grip on their filing system.

Why this process has become so difficult to navigate in the years following the collapse of the housing market remains a mystery to most, which is why most would benefit from the assistance of an experienced real estate attorney.

Experienced attorneys have been dealing with stubborn lenders since before the collapse of the market in 2007, making them far more equipped and experienced to negotiate the terms of a fair loan modification for their clients.  From a business standpoint, hiring an attorney to handle the commercial loan modification process makes sound financial sense.  When the reputation of the business is on the line, no business owner in his or her right mind would attempt to do a job that they have little to no knowledge of.  Instead, the business owner is likely to hire a professional to offer assistance and guidance.  If the business owner would seek outside assistance and guidance for other aspects of their business, why wouldn’t the business owner seek outside assistance and guidance for the one aspect of the business that could effectively save the business?