Five steps to successful commercial lending training

Obtaining commercial loan training can be a very labor intensive process. Having all your “ducks in a row” is the key to successful training. For property owners who can’t refinance, have a balloon payment to pay, can’t pay their mortgage, or are facing foreclosure, commercial loan training can accomplish one or more of the following:

1. Reduce interest and/or principal
2. Extend the reset period or expiration date to defer balloon payment
3. Defer payments
4. Temporary interest-only payments
5. Avoid shielding

Check out the following five steps:

1) Required paperwork
The necessary paperwork is collected from property owners. Required Documents: Rental List, Copies of Last Year’s Expenses, Lease Agreements, Copies of the Mortgage Invoice, etc. If you don’t have all the required documents, the whole process may be delayed.

2) Research Analysis
Before submitting a commercial loan training to the lender, a financial snapshot of your situation is needed. The lender is particularly concerned about your ability to pay each month if your loan has been restructured to more favorable terms. Determining the current market value, rents and recent comparable sales are also important factors to take into account. After a review of the note is completed, a training package is generated.

3) Loan submission
Once acknowledgment of receipt is received from the lender, the submission package will be forwarded to a training specialist. Failure to acknowledge receipt of the training package from the lender could mean your file is left hanging in the mailroom for weeks or ‘lost in Neverland’.

4) Negotiation process
The training specialist reviews the package and presents a loan modification proposal. Sometimes the property owner or an outside training company will make counter offers until an agreement is reached with favorable loan terms. The whole process from start to finish can take between 2 and 3 months. Stay in regular contact with the lender’s training specialist until a proposal is received.

5) Final approval
Once the lender approves the newly restructured mortgage loan, a proposal is submitted to the property owner for review. The owner can expect the following options: payment deferral, lower interest rate, extended term, increased cash flow or reduction of principal. The lender can propose any combination of options. Finally, the amended loan documents are signed by both parties to make the changes official.

Because so many commercial property owners are unable to meet their mortgage obligations, commercial lenders are now willing to modify their existing mortgage loans to avoid foreclosure. The key to avoiding default is to be proactive by contacting your lender or enlisting the help of a third party professional commercial loan training company.

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Commercial mortgages are much more complex than residential mortgages. Hiring a professional commercial loan training firm can help you navigate the negotiation process with your lender.