Real Estate Loan Workout Attorney In New York, NY

Structuring a Real Estate Loan Workout

The approval of a loan modification request by a lender involves a comprehensive assessment of various factors. Essentially, the primary motive behind a lender's consideration of modification is to increase the likelihood of receiving payment for the outstanding debt. As a result, the potential for securing a favorable loan modification depends on your ability to demonstrate that the proposed changes will offer the financial relief necessary to enhance income and maintain or resume regular payments. Several factors play a role in this evaluation:

• Proactive Approach: Lenders are more likely to cooperate if you promptly reach out and seek solutions at the first sign of difficulty meeting the existing payment terms.
• Collateral Value: The degree to which the property secures the lender's interest influences their willingness to negotiate.
• Payment History: A history of timely loan payments and a positive overall credit history can positively impact the evaluation.
• Business Strategy: Presenting a well-structured business plan and providing realistic, verifiable projections for future revenues is crucial.

At J Singer. Law Group, PLLC, we prioritize a proactive approach to secure advantageous loan workouts for our clients. We understand that lenders are more willing to cooperate when clients promptly reach out to address payment challenges. We leverage well-structured business plans grounded in realistic future revenue projections to demonstrate the client's commitment to financial recovery. A history of timely loan payments and a positive credit history further strengthen our negotiation position. Additionally, we emphasize the collateral value to assure the lender of their security. By taking swift, well-planned action, we help our clients secure favorable commercial loan workout terms, allowing them to address financial difficulties confidently.

Types of Real Estate Loan Workouts

The approach to real estate loan workouts can vary, tailored to the specific circumstances of the borrower and lender. Below are several common strategies employed in loan workouts:

• Loan Modification: This strategy involves altering the loan's original conditions, possibly by lowering the interest rate, prolonging the loan's due date, or switching from a variable to a fixed interest rate.
• Forbearance Agreement: In this case, lenders may consent to a temporary reduction or halt in mortgage payments for a designated period, granting the borrower time to stabilize their financial standing. Usually, any payments skipped during this period are appended to the loan's end or settled in one total amount.
• Deed in Lieu of Foreclosure: Here, the borrower hands over the property's title to the lender, freeing themselves from their mortgage responsibilities and circumventing the foreclosure process.
• Short Sale: This option permits the borrower to sell the property for an amount below what is due on the mortgage. Depending on the agreement, the lender might write off the remaining debt or ask the borrower to cover the shortfall.
• Refinancing: With refinancing, the existing loan is substituted with a new one, potentially featuring a reduced interest rate or a longer repayment timeline to diminish the monthly payment burden.

Each of these strategies offers a pathway to renegotiate the terms of real estate loans, aiming to create a more manageable situation for the borrower while ensuring the lender can recover their investment. At J Singer Law Group, PLLC, we specialize in representing commercial real estate (CRE) investors and developers navigating financial challenges or experiencing downturns in their revenues.