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You can’t expect much help from the present economic condition. The rates of unemployment are reaching new highs almost every other day, thanks to the recession that seems to have put the economy out of order. The real estate sector has been severely affected by the current economic trend. This is evident from the number of real estate foreclosures that have taken place in the last few months. Experts predict that the commercial properties are the next to face foreclosures. The businesses are going for commercial mortgage modification (also known as commercial loan modification) to prevent property foreclosures.
Commercial mortgage modification
So far you have known commercial mortgage modification as a way to prevent foreclosures. It is time you knew how it helps the economy get back on track by reducing the incidents of foreclosures.
The commercial mortgage modification helps the borrower as well as the lender. The lender agrees to modify the terms of the loan in favor of the borrower. Not only this prevents foreclosure, but this makes it easy for the borrower to pay back the loan as well. Even a 1% decrease in the interest rate can eliminate a significant portion of the debt.
Another way of commercial mortgage modification involves the lender agreeing to defer or postpone the commercial mortgage payment. The borrower may expect a period of around (3-6) months as payment moratorium. This additional time period is to help the borrower fill the vacancies in his/her properties and build up the funds.
The performance of the commercial sector plays a huge role in the economy. Credit deficit, dips in property values and weak cash flow are responsible for the commercial sector not looking up the way it should. Commercial mortgage modification helps the businesses survive in these adverse conditions. Increased foreclosures are going to hit the economy very badly. That is the reason why the lenders are so willing to make it easier for the borrowers to pay off their loans. They are doing everything to ensure borrowers don’t fall prey to foreclosures.
Commercial mortgage modification – Eligibility criteria
There are some things that you have to take into account when you’re trying to qualify for commercial mortgage modification. The lenders are going to weigh the benefits and drawbacks of your new loan repayment method. The factors that they are likely to focus on include the equity in your property, your payment history and financial condition. The local market situation also plays a role here.
Remember, lenders will always try to be on the winning side. The best thing to do would be to seek advice from a commercial mortgage modification expert. This will help you judge your options better and make proper decisions. The whole idea of commercial mortgage modification is to lessen the burden of debts on the borrower. An overwhelming burden of debt impairs the ability to judge things well. Things start looking brighter to a borrower once the debt burden is reduced to some extent. Commercial mortgage modification is the right way to start with the debt payment process.