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Commercial Loan Modifications


Loss Mitigations LLC is the leader in the commercial loan modification and discount note workout industry. Negotiating with your lender on your behalf, LM LLC can help you:


·                     Reduce Principal and Interest payments

·                     Extend the term of the note

·                     Interest only payments for a period of time

·                     Suspend payments for a period of time

·                     Stop Foreclosures on distressed properties , Auctions, and Sheriff Sales

·                     Facilitate Short Sales

·                     Stipulated Foreclosures

·                     Extend Balloons

·                     Combinations of remedies / solutions mentioned above






In the above video from CNN, a Congressional panel looks at the state of the commercial real estate market in the wake of the financial crisis. President Obama’s plan makes residential properties affordable but completely leaves out the commercial property owner. Commercial Modification companies like Loss Mitigations LLC (LM LLC) take up the mantle on behalf of the commercial property owner by working with banks to stave off foreclosure and help with cash flow problems. Banks are willing to talk to residential property owners in order to comply with TARP (Troubled Asset Relief Program) but not to small and medium business owners with commercial properties. That’s why they need a third party like the experts at LM LLC working on your behalf to workout your discount note with the banks.


Our Guarantee


Commercial Loan Review


“Our clients deserve the best!"

The vast majority of our Commercial property owners obtain the solution for which they contract. You can be assured when we approve your case and become our CLIENT, we have a high degree of certainty we can successfully negotiate with your lender, resulting in a solution to your problem. In the event, we cannot obtain a successful workout, we promptly provide a refund as stated in the terms of our agreement.


 LM LLC The leader in the commercial loan modification, is now available to you where you are online. Follow us on Twitter and like the LM LLC page on Facebook for a consistent stream of insightful industry information from our professional staff. These social networks also provide a quick and easy place to get into contact with LM LLC for a FREE no obligation consultation. Updated weekly with fresh content, we promise quick and detailed responses to inquires.


LM LLC‘s Commercial Loan Mod is THE PLACE for news and tips for everyone with a commercial property facing foreclosure or balloon payment due on any commercial property from Hotels, Motels, and Resorts to Malls, Strip Centers, and Restaurants. Subscribe right here and look forward to all the information from the most experienced and trusted Commercial

Get A Commercial Loan Workout To Help You Now


February 1st, 2011


So many companies today are in dire straits because they do not have the kind of information they are going to need in order to get things to work out for them. If you are hoping to have a much better chance at getting the sort of solution that will not risk your company, you need to know that if you choose a commercial loan Workout and you have the right kind of legal help to do it the right way, things can be a whole lot easier for you. It is certainly going to be simple to get the best value if you do things the right way. What you want more than anything is to make sure that you are being smart about how you approach things. If you are looking for a serious, well thought out way to a commercial refinance agreement then you are going to want to find quality help. Expert legal advice is available to make sure the lenders do not work the deal out only in their favor.

You need help with these kinds of situations simply because the lender is going to go for the kind of arrangement that is most beneficial to them, naturally. This is nothing insidious, but if you want the deal to work for you, then you need advice on whether or not a short sale is a good option. Choosing the best legal team is going to make a huge difference in the long run for your company.


When Choosing Loan Modification Foreclosure Can Be Dodged


January 30th, 2011


These days, a business is going to have to be savvy if they want to find a way to get through tough times. Much of the time, a bit of professional advice can go a long way towards helping that business avoid a foreclosure that would not be beneficial to them. With the right loan modification foreclosure can be avoided if you have the right legal team working on your behalf in order to ensure that you can get through the situation in a way that keeps you from getting taken advantage of. Companies today need to know that most lenders will be in favor of settling for having commercial short sales instead of dealing with problems that are just not going to get any easier if the lender has any say. You need protection if you want to get through tough times like this because no lender is obligated to look out for the borrower’s best interests.


Lenders today are definitely inclined to consider any options that are going to give them instant cash they can use instead of hard property they do not even want to own in the first place. Using this to your advantage, commercial short sales are possible which can help you get the best deal and make sure you are not short changed on what you could get in terms of a reduction on your debt. This is the smart way to make sure you get the kind of savings you actually deserve to get.

Use The Short Payoff Strategy To Your Advantage


January 28th, 2011


These days, lenders are not doing so hot if they have to deal with real estate in any way. A lot of companies have commercial properties that they have had to lose due to the economy not exactly going the way they need it to. Things can be extremely difficult for those who do not have the right options working out for them, so if you want to find a way to get the best value then you have got to do what it takes. You can find that most lenders will jump on the chance for a short payoff since it is going to make their business a whole lot easier to conduct. Those of us who want to be able to get a good value can always find that when we know what we are doing. If you decide to go for the best value in professional advice on functional commercial loan workouts, you are going to see that this is even easier than you might ever have expected. This can be your first step to making your business simpler to conduct.

What you are going to have to do is find a way to make things work out that will give you the best advantage. If you are looking into getting a quality commercial short sale then you definitely stand to benefit. It is going to make your life a whole lot easier, as well, when you can do something like this to ease the burdens on your company.

With The Right Loan Modification Foreclosure Doesn’t Have To Happen


January 26th, 2011


It is not easy for any business right now to be able to get by if they have any troubles coming their way due to financial problems. What is definitely going to need to happen is a very smart approach that is going to make sure the company is safe. When you can look into getting the best kind of loan modification foreclosure does not even need to happen. People who are trying to get a better deal for their company and keep the property are going to like hearing this, but you do have other options if your company is not interested in hanging on to the real estate. You can go the route of trying for a short payoff which a lot of lenders may agree to. The thing you need is good quality advice on your side if you want to make things work out as well as they can.


Anyone that is serious about getting the best for their company needs to have this kind of advice working for them. No matter what you are up against with a lender your company owes, the problems can be solved. If you choose to go with commercial refinance then you can normally get more affordable payments since companies would prefer to keep cash coming in than to have to pay all of the fees to sell a property. Those can add up quickly and are not cost effective for the company to have to deal with so that’s why this will work.

With Short Sales Commercial Lenders Can Be Easier To Work With


January 24th, 2011


Life can be so much simpler when we understand how to handle things. If you are looking to get your company out of any kind of trouble with loans then you definitely need to know the full range of your options so that you can choose one that will work out the best. When you consider that if you go with short sales commercial lenders are likely to agree, you can avoid foreclosure and they are going to be happy at this. What you need to keep in mind, however is that you really do need professionals on your side to make sure you get the best deal you can. The thing about a short sale is that the lender is going to work things in their favor and that could leave your company holding the bag. You really do want to make sure you invest wisely if you are going to get through things.


Plenty of us already know that we have options in these situations, but the expert advice available to you now is going to be a very big help. You do not have to worry about problems when you can find solutions that will work out for you. If you want to get the right kind of commercial loan modifications then you need to understand that this is easier to do than you might think. It is not all that tough if you want to be able to find a great value for the kind of money that you want. It is certainly a very smart idea that can help you out.


Commercial Short Sale Could Be Your Easy Solution


January 22nd, 2011


We all would do well to get the kind of value that is so easy to find today in the right sort of service if we run a business that is running into trouble. Many companies are having trouble with their loans in this current economic climate and that is precisely why it can be a good idea to consider a commercial short sale to help a company work things out with a lender. This can avoid the company getting taken advantage of so that is always a positive thing. In times like these, the borrow will often be under such stress that, not being the one who has the power in the relationship, they let the lender get by with a lot more than they should, thus losing out on all kinds of things that they could have had handled better in their favor. This is the situation you want to avoid if you are the company in question.


One thing that none of us want to have to go through is the kind of stress that comes with losing out in a situation where we are already not the one with the most power. Lenders are stuck for liquid assets right now, so they want to get rid of properties. This is why when it comes to short sale commercial lenders are often quite open to the concept of agreeing. They want to get rid of those properties before they have to spend a lot of money on them.

Avoid Bankruptcy Commercial Loan Troubles Can Be Solved


January 20th, 2011


People these days are definitely not in a great place when it comes to getting through the economic down turn. A lot of companies are finding that they need help because in order to avoid an almost guaranteed bankruptcy commercial loan changes are going to have to be made for them. They may not understand what all of their rights are and what they can do to get a better deal on the loan so it is definitely crucial that they do what they can to learn more about what can help them. Most companies out there can do a variety of things to get their loans reworked in their favor if they turn to the right kind of service for help, but many more companies have no idea that such a service might exist in the first place. The key goal here is to find a deal that can fix things easily.


Borrowers in a commercial lending situation almost always need good advice to get them through. This is why expert advice in the form of a professional commercial loan review can be such a huge help to so many companies. Choosing this way of approaching the loan can lead to commercial loan workouts that really do solve the problem. It is definitely a smart way to handle problems before they get to be too much to deal with. You can certainly count on them to end up being a smart move if you know what you are doing.


With Loan Modification Foreclosure Could Be Avoided


January 18th, 2011


So many businesses are now in turmoil because while the bulk of this past recession is said to be over now, the reality is that a lot of things have not changed for us. We all have to do what we can to get help if we have a commercial loan and are starting to struggle with the repayments. This is why with loan modification foreclosure can be avoided in many cases. It is certainly smart to look into getting professional advice on this kind of matter if a company is serious about getting better results for themselves and not having to go through the loss of the property in way that is going to deal a great amount of damage. Often, commercial short sales can be a key solution that both borrowers and lenders can agree on. It is the right way to handle things for the long haul in many cases, but there need to be many things taken into account.


Any person that is looking to find the right kind of answers is going to have to do what they can to get the best advice out there. This is why when it comes to short sales commercial lenders will often agree, but you still need to have some professional help to make sure that everything can work out effectively for you if you are the borrower. Thinking things through is the best route to go for those who want to know they are going to be okay.


                   Recent Posts


                   The Commercial Financial Crisis

                   The New and Improved Commercial Modification Blog!

                   Get A Commercial Loan Workout To Help You Now

                   When Choosing Loan Modification Foreclosure Can Be Dodged

                   Use The Short Payoff Strategy To Your Advantage


·                     Categories


                   Commercial Brokers

                   Commercial Discount Note

                   Commercial Loan Modification

                   Commercial Loss

                   Commercial Mortage

                   Commercial Refinancing

                   Commercial Short Sale

                   Commercial Workouts




Throughout our years in the industry, we have successfully renegotiated commercial notes with workout solutions that are mutually beneficial to both our clients and their lenders. Our expert negotiators have been able to obtain favorable, permanent changes in the terms and conditions of our clients' commercial loans. Our commercial loan modification program has helped our clients keep their properties, and be able to meet the cost of operations, and put their fears of future late payments and possible foreclosure to rest. We have successfully stopped sheriff sales, receiverships, and foreclosures. This has saved our clients thousands of dollars--and their properties.


Commercial Loan Workout


Many businesses are struggling to meet their obligations on their commercial real estate loans. The staggering number of defaults have influenced many commercial lenders to start renegotiating the terms of commercial notes. Our team of well-trained professionals specialize in commercial loan workout and deferment solutions. We are committed to our clients and their commercial loan workout needs. We have literally saved our commercial property owners from bank foreclosures and have helped them become cash flow positive.


Loss Mitigations LLC Services


LM LLC is dedicated toward helping our clients obtain the perfect loan workout solution customized to their needs. We deliver creative loan workouts that are case-specific. With LM LLC, you can be sure that you are receiving a top tier service for commercial loan modifications. As a result of our success and confidence with our commercial loan workout program, we offer a full guarantee on our services. Our objective is to help clients receive the most favorable commercial loan modification possible.


Loan Restructuring On Commercial Properties


We are able to perform commercial loan restructuring on:


·                     Hotels, Motels, and Resorts

·                     Condominium and Apartment Buildings

·                     Malls, Strip Centers, and Restaurants

·                     Office Buildings and Complexes

·                     Industrial, Storage, Warehouse and Manufacturing Facilities

·                     Health Care Facilities

·                     Mobile Home Parks

·                     Land Development

·                     And Much More!


How to Get a Commercial Loan Workout


The first step toward receiving help with your existing commercial mortgage is to contact Loss Mitigations LLC (LM LLC).


Contact LM LLC at: 877-733-4786 x 801

You can also choose to fill out the no obligation, free consultation form on the right. Within 12 hours of submission, one of our highly skilled, knowledgeable, friendly and caring account managers will be in touch with you. They will listen to your particular situation, discuss your specific goals for you and your property, review your case for evaluation, and notify you whether or not your case has been approved for our commercial loan workout program.


If You Have ANY Of The Following Issues On Your Commercial Property, WE CAN HELP!


·                     Having Trouble Making The Monthly Payment On Your Property?

·                     Behind On Payments For Your Property?

·                     Have You Received A Notice Of Default?

·                     Are You In Court With Foreclosure Proceedings?

·                     Has Your Lender Been Granted A Judgment Of Foreclosure?

·                     Is Your Property About To Go Into Receivership?

·                     Has An Auction/Sheriff Sale Date Been Set?


Above all, don't become paralyzed into "inactivity" (this is the most common property owner condition) because of the stresses you are under.




Commercial Loan Review


"I own a strip mall just out side of Houston, Texas and have been struggling the last year or so with keeping my property fully occupied and it didn't take long before I was pulling money from my pocket to just keep up the payments on my mortgage. My cash flow was negative and with the economy being in the toilet it didn't look good. I considered selling the property but was told that it wasn't a good time by a local broker. I was stressed out and because of it my family life was suffering. You guys did it! First, after I became a client, you made the whole process simple and put my mind at ease. Second, you lived up to your reputation by aggressively, yet professionally, handling my commercial loan modification. My monthly nut to my Mortgage Payment was reduced and I was able to focus and improvements on my property, which allowed me to secure a solid tenant which has nearly doubled my monthly rental income and allowed me to pay down my credit card debt. You guy's are for real! Thanks - Good work guys!"

"My father and I run and own a corner liquor store and a 42 unit building attached, we have owned the property for over 20 years and have always been able to make a decent living. I never expected that when it came time for my loan to adjust on the building that I would not be able to refinance for a lower rate! My interest rate has sky rocketed and it forced my father and I to raise the rent on the apartments above. It wasn't long before even some of our older tenants were forced to move to cheaper apartments. My father and I contacted our local attorney in search of answers. He's a nice guy and very knowledgeable about the real-estate market but had never done a Commercial Loan Modification. I tried contacting my bank in hopes of refinancing my loan and avoiding foreclosure. I told them that there was no way I could continue to make the new payments on my loan. They took down my information and told me a service professional in their default department would be calling me. He never called! The only call I received from the bank was from the collection department. After your company did my loan modification, my interest rate was significantly lowered and my monthly payment was decreased by over 40%. My father and I have some dignity again and I appreciate all the hard work that was done. This was a smart business move."

"It's all about cash flow! Your company was able to restructure my loan and in turn I was able to increase my cash flow. I received expert advice and was kept well informed throughout the entire process. I also, liked how fast it was done. I have already recommended your company to a business associate of mine."


"I am the acting partner of a relatively large well known real-estate management company on the west coast. We have over 250 properties in our portfolio that we manage on a daily basis. In the past 8 months or so, many of the property owners have called asking if our firm had any recommendation for a good law firm that handles Loan Modification Restructuring. My job is to facilitate a property owner's needs and make sure his agenda is our priority. I had made a couple of phone calls to some associates in the management business and was told that bar none your company was the most reputable. I called and spoke to a Marci and was blown away with her knowledge and experience with working with the bank. She told me that this was nothing new and in fact she had been in the commercial market place for most of her career. She explained how a bank was often reluctant to restructure a loan for a client because it was not in their best interest. It's not until the bank is contacted by an outside firm and know the client has hired us to look out for their best interest do they began the negotiating process. Simply put the bank knows that resolving the matter is in their best interest and in the end is best for their bottom line. The Bank however does not want to modify their entire portfolio and that is why often time's, customers come to us for help, because their bank or lender said they did not qualify for a modification. She sent me an e-mail link to her site and we spoke about some of my client's property losses and how the economy was totally upside down. I was so impressed with her knowledge of how it all works that I offered to pass her info. Their company did such a great job on a couple of my clients that I now recommend that all my clients call them before they make a decision. I'm very happy to recommend my clients to your company."

 Frequently Asked Questions

Commercial Loan Modifications


*                  What is a Commercial Loan Modification?



With our nation in an economic recession, and with the retail market suffering, tenants on commercial properties are experiencing difficulty paying their rents. As a result, commercial property owners are becoming cash flow negative and defaulting on their mortgages. Banks and commercial lenders cannot keep up with the current number of defaults and want to minimize their losses. Therefore, with hopes of avoiding a pricey foreclosure process, they are willing to restructure the terms of defaulted loans, By modifying a commercial loan properly, a property owner can avoid foreclosure, greatly reduce their monthly payment, and reduce the principal amount owed. Commercial loan modification is a relatively new market and with so many modification possibilities, it's best to consult an expert before beginning the process. Borrowers often find their Bank or commercial lender difficult or unwilling to renogiate the terms of a loan. This is where companies like LM LLC come in. Borrowers find it extremely beneficial to seek the help of the professional representation that Loss Mitigations LLC offers.


What does a Commercial Loan Modification Do?



One must understand that not all commercial loan modification companies are the same. The number of services they provide, amount of experience, and the results they produce may vary greatly. With that being said, typically a commercial loan workout company will generally offer the following services:

·                     Expert Consultation and Analysis

·                     Pre-Qualification

·                     Qualification

·                     Negotiation

·                     Final Modification and Loan Restructuring


What services does LM LLC provide?



This is a basic outline of Commercial Loan Review's Services:

·                     Provide you with a comprehensive evaluation of your commercial portfolio and financial Situation

·                     Assign you a loss mitigation / commercial loan modification professional who will analyze your property

·                     Present all your options so you can make an informed decision

·                     Help renegotiate the terms of your existing commercial mortgage to prevent a default.

·                     Work to restructure your current loan for better property income cash flow

·                     Negotiate favorable terms with your lender so you get the best deal possible


How will these services help me?



These services can help you in several ways. For instance:


·                     Avoid Foreclosure

·                     Workout and Deferment Solutions

·                     Reduce Interest and/or Principal Amount

·                     Improve Cash Flow


What can one expect from our Commercial Loan Modification Firm?



We are dedicated to our clients and work extremely hard to get the results you deserve. All of our clients have been very happy with the results from our company- we have saved many commercial property owners from bank foreclosure and helped them become cash flow positive. We are so confident that you will get results that we offer a 100% money back guarantee. We truly value your business and we want to make sure you feel very comfortable with the modification processs. At LM LLC, we take pride in offering the most professional, educated, friendly, and affordable firm in the nation. You will always receive top tier customer support. Relationships with clients are very important to us.


We will analyze your financial situation, compute how much your property value has declined, and how much you can afford to pay each month. We also look into the possiblity of getting the principal amount reduced.


We audit and crunch the numbers before they get to your lender. While other companies are using unqualified representatives, we have highly trained and experienced agents, attorneys, and appraisers. We possess a well-connected network to help us achieve the best possible result for your particular situation.


How do commercial loan workouts work?



The biggest part of the process is research and analysis. Once all the components of your financial situation

are taken into account, the next step is to review your current loan, and consider the options available for your particular situation. We have found that when our clients talk openly and honestly with us about their situation, we can best serve them in the modification process. We work with you during the modification process to get all documents and forms compiled. Once everything is in place and agreed upon, the modification is presented to the bank for approval.


What are the types of commercial properties can you modify?



A loan modification can be performed on many different commercial properties. For Example:


·                     Condominium and Apartment Complexes

·                     Mobile Home Parks

·                     Malls, Strip centers, and Restaurants

·                     Office Buildings and Complexes

·                     Hotels and Resorts

·                     Industrial and Manufacturing Warehouse Facilities

·                     Land Development

·                     Health Care Facilities

·                     And More!


Do You Qualify For A Loan Modification Plan?



The main question a bank or lender will need to answer before renegotiating a loan is: Will the cost of foreclosure be greater than the cost of a loan modification? The lender's decision will be based on their best interests. Your ability to successfully negotiate a plan will depend on many factors. Some of these factors include:


·                     Amount Of Equity In The Property

·                     Past Payment Experience

·                     Costs Of Foreclosure

·                     Borrower's Financial Position

·                     Borrower's Willingness To Retain Property

·                     Local Market Conditions


In addition to these factors, many small commercial loan modification plans will depend on the financial situation of the borrower's business. The lender must feel confident that the commercial property owner will produce enough profit to service the new payment successfully. Regardless of whether the property in question is a single family rental unit, multi-family apartment building, or retail property, your lender will request a business plan. The plan should include realistic numbers and a convincing explanation as to why the restructured plan will work. Be prepared to present a realistic proposal and back it with solid numbers. Consider seeking the services of an accountant, attorney, or experienced loan modification consultant. A negative result could mean the loss of a property and a business.


Many banks have created special legal departments to deal with the protection of their interests. That is why it is so important that you or your company seek the assistance of an outside modification agency like LM LLC to represent you.


Is it harder to modify large commercial properties?



For larger commercial properties such as large retail, office complexes, and manufacturing facilities, the process of commercial loan modification becomes more complicated, but not overwhelming. Borrowers tend to be large corporations and lenders range from individual banks to large securitized real estate trusts. Often times the process is very similar to that of a smaller commercial property just on a larger scale. As with many things, the bigger the objective, the more professional help is needed - that is why many owners of large commercial properties are seeking the assistance of Commercial Loan Review.


What if I filed for bankruptcy?



You still have options, but the bankruptcy must have already been discharged, or dismissed. Please contact our office for further consultation.


What is a Short Sale?



As the name might imply, commercial short sales, as an alternative to foreclosure, can permit commercial borrowers with proven hardships to sell property to a third party for an amount less than the balance of the existing loan. Our staff of professionals have extensive experience and a high understanding of short sales and what they can mean for our clients. If a short sale appears to be the best alternative to foreclosure for a client, we will work hard to negotiate the best possible terms. In a short sale, the borrower must prove financial hardship to the lender. If this is done successfully, the lender will give the borrower permission to proceed with the short sale. The lender, in effect, agrees to accept less than the amount owed on the loan, and releases the borrower from the note rather than allowing the property to go into foreclosure. However, many times the commercial property owner is responsible for the difference of money that is discounted on the short sale and is forced to pick up the difference as additional income on their tax return. This could end up costing the property owner to show unwanted gains on his or her tax returns and may put that person in a higher tax bracket. Our Firm can advise you on how to avoid this costly mistake.


Foreclosures can be devastating to credit ratings and that can create major issues for years. Short sales are often the last-ditch effort to prevent foreclosure, and while they probably won't keep your credit rating at its previous level, they can be far less devastating than foreclosure. With proper mortgage mediation and professional guidance, a short sale can set you on the road to financial recovery. Many lenders prefer short sales, since their losses on loans will be far less than they could be in foreclosure proceedings. Most are willing to consider the most cost-effective way out of any financial crisis. Short sales are a less expensive and much faster way to relieve some of the consequences of unexpected financial hardships.


What is a forensic audit?



A forensic audit is an in-depth evaluation of your loan documents you signed at closing which will determine whether or not your bank or lender has violated any state or federal laws regarding the interest rate, pre-payment penalties, excessive fees, high cost loans, fraud, Truth in Lending Act, and the Real Estate Settlement & Procedures Act known as (RESPA). All promissory notes must comply with the fair lending laws. Any error or omission on the part of a lender or their agent constitutes a violation. If a note contains state or federal lending violations, the Loan is NOT enforceable.


What do I do if my loan process was unlawful?



Often times, property owners find that their loan agreement and process was unlawful. As a result, you may qualify for some financial relief! Because of the Truth in Lending Act, penalties have been created for lenders who fail to comply with standard loan processes. There are many rules to this and we suggest you contact us immediately so we can determine violations in the loan process you experienced.




Commercial Loan Modification Terms and Definitions



Acceleration Clause


a loan clause that gives the lender the right to declare the entire amount immediately due and payable upon violation of another specific loan provision. This is also often referred to as the Due on Sale Clause.

Capitalization Rate (Cap Rate)


Net Operating Income divided by Market Value. If the net operating income is $100,000 and the market value of the property is $1,000,000 then the cap rate is 10%. This is one of the most commonly heard real estate investing term.

Cash Flow


Net Operating income minus the total of all debt service payments. (See definition of "net operating income" below.) Another popular real estate investing term.

Chain of Title


a history of conveyances and encumbrances affecting a title from the time that the original patent was granted or as far back as records are available.

Clear Title


a marketable title that is free of clouds and disputed interests. Conditions, Covenants, and Restrictions (CCR's) - promises written into deeds and other instruments agreeing to performance or non-performance of certain acts, or requiring or prohibiting certain uses of the property.

Conforming Loan


A loan which has underwriting criteria that conforms to the strict guidelines of Fannie Mae, Freddie Mac, FHA or VA.



A condition that must be met before a contract is legally binding.

Conventional Loan


A conforming loan with no government guarantee; that is, a Fannie Mae or Freddie Mac loan. (See definition of "conforming loan" above.).

Debt Coverage Ratio (DCR)


A ratio used in underwriting loans for income properties. Divide Net Operating Income by total debt service. Ratios of 1.20 and higher considered the norm. This is a real estate investing term commonly used by lenders.

Debt to Income Ratio


Also known as debt ratio. Divide total of monthly debt payments to gross monthly income. Another popular real estate investing term with lenders.

Debt Service


mortgage payments of principal and interest.

Discount Points


One point equals one percent of the loan amount. Two points on a $200,000 mortgage would cost $4,000.

Due Diligence


The act of carefully reviewing, checking and verifying all of the facts.

Gross Rent Multiplier


the sales price divided by the gross annual rental income. Another common real estate investing term.

Loan-to-Value (LTV)


The ratio of the loan to the value of the property. If the loan is $160,000 and the value of the property is $200,000, the LTV is 80%.

Negative Amortization


Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all the interest that is due at the current interest rate, resulting in the borrower deferring the interest payment. The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller. This is called negative amortization.

Net Operating Income (NOI)


Gross income minus all Operating Expenses except for debt service. Cash flow is defined as NOI minus the total of all debt service payments.

Non-conforming Loan


A loan not meeting the underwriting requirements of Fannie Mae and Freddie Mac. e.g. the vast majority of loans.



acronym for Principal (P), Interest(I), property taxes (T) and insurance (I).

Prepayment Penalty


fee charged by lender for paying off a loan within a specified period of time after the loan has closed.

Quitclaim Deed


a deed that conveys only the grantor's rights or interest in a property, without stating the nature of the rights or interest and with no warranties of ownership.

Triple Net Lease


lease in which the tenant pays all operating expenses of the property e.g. taxes, insurance, and maintenance in addition to normal operating expenses.

Bait & Switch


Bait and switch is one of the methods used by predatory lenders. The loan officer sells you a loan over the phone and you haven't signed anything yet but agree to the terms. You go ahead and start all the rest of the process, which takes time. You stop looking elsewhere for a loan. Valuable hours have been wasted when you find out that the terms are now different and worse. Sometimes it's just a little sometimes a great deal. You sign off on the deal but you know you we're not wrong with your orginal understanding. The loan officer tries to convince you that you didn't understand or possibly did understand but remembered it different. What's a point or two? A lot.

Cash Flow Mortgage


Used with rental properties. It is a debt instrument where nearly all the cash that comes in from the rental property is paid directly to the lender and this is without an interest rate. This is important if the lender is facing foreclosing on the property and you typically see this more with commercial office buildings however it is also used with other rental properties. This type of mortgage usually not for the original term of the loan and rarely goes to the full term from the time of modification. It has limitations as to the time and the net operating income of the property.



Otherwise known as a "DIL" cannot be used by people who can afford their mortgage. It is a way to dispose of a property by the mortgage holder as an exchange from the obligations of the money owed on the loan. Instead of the lender foreclosing, this is a way to just give up but DIL's are usually only an option if it is in the banks favor.

Distressed Property


Real Estate that is currently under foreclosure proceedings or may be facing foreclosure because it is not bringing enough money to the lender to satisfy the mortgage obligation.

Elder Abuse


Simply stated, "elder abuse" is taking advantage of the elderly. Most of our senior citizens have problems understand complex issues and shady lenders take advantage of this fact. Seniors usually have a good amount of money set aside as far as either money in the bank or equity in their investment property. These unscrupulous lenders convince them to take a loan out that they do not need or possibly with terms that can lead them to lose their equity or their savings, usually with a commission to the seller far exceeding the normal rate. This happens so much that the industry has even given it a name. It's called equity skimming and equity theft. It is a federal crime to abuse the elderly and federal laws that carry criminal and civil fines.



There is General Forbearance and Special Forbearance (for FHA and VA loans). Forbearance by definition means to hold back enforcing something, typically an action. Lenders may allow you to suspend payments for a short period of time while you seek out other options to your situation. Of course, the forbearance is based on bringing your loan current. Forbearance options usually are coupled with a reinstatement of the normal terms of the loan when you have been able to bring your loan current.

Foreclosure Bailout Loan


A foreclosure bailout is a loan. Its purpose is to replace your current loan (everything including balance, back payments and fees). Because the new lender has paid off the old lender the foreclosure is stopped. This option is used when you are encountering a difficult lender who will not work with you. But these loans come with a heavy price. First, you must have enough equity in your property because bailout loans are based on 60-75% of the current market value. If you owe more than the property is worth, then this is not the option for you. On the other hand, if you do meet that qualification, it is a good time to not only do a bailout loan but also pull some cash out of the property as well.

Loan Reinstatement


The first thing you have to prove is that you have found a solution to your financial hardship and can prove it. If you are about to receive money and that money will allow you to bring the note current, you can get a loan reinstatement plan from the lender. Loan reinstatements are warranted when you can pay back all your missed payments, late fees, legal fees, foreclosure fees and of course the principal and interest on a regular basis.

Mortgage modification


This is why you are here because mortgage modifications, also known as loan modifications are the permanent change in one or more substantial terms of your loan. It will allow the loan to be reinstated. A mortgage modification has but one main purpose. To allow you to continue to make payments on the loan but now under terms you can afford to make.

Partial Claim


Partial Claims are used on FHA and VA loans. This option is used where the mortgagee will advance funds on behalf of a mortgagor in an amount necessary to reinstate a delinquent loan (not to exceed the equivalent of 12 months PITI). The mortgagor will execute a promissory note and subordinate mortgage payable to HUD. Currently, these promissory or "Partial Claim" notes assess no interest and are not due and payable until the mortgagor either pays off the first mortgage or no longer owns the property.

Pre-foreclosure sale


Knowing when to lie down sometimes is the wisest of all. Your lender knows this and if you agree to dispose of the property, your lender will typically agree to give you a specific time to find a purchaser and pay off the total amount owed. This option is very hard because this also means that your home may be on the market for an extended period of time and your lender may not agree so you may in fact be delaying a full foreclosure. Use this option only if you have a buyer in mind. You also need to consider that the price you sell must cover all your old costs as well and with the Real-estate market at an all time low, this may not happen. Your lender, knowing you want to do this, may ask you to do a short sale. See short sale in this list.

Predatory lending


Predatory lending is a common phrase but is not a legal term. It describes the practices used by some lenders to specifically target certain races or the less educated, elderly and even certain geographic areas. These lenders usually charge high interest rates, abusive or unfair lending practices, and marginal legal terms. The loans are usually backed by collateral of some sort such as a car or house. If the borrower defaults on the loan, which happens a great deal because the borrower was not clearly explained or was in a pressured state of mind, the collateral is repossessed and the collateral sold. Additionally there is usually fees associated with the sale that are unreasonable and seek to acquire all the value of the collateral, leaving the borrower with nothing more than a memory.

Real Estate Settlement Procedures Act ("RESPA")


It was created because various companies associated with the buying and selling of real estate, such as lenders, realtors, construction companies and title insurance companies were often engaging in providing undisclosed kickbacks to each other, inflating the costs of real estate transactions and obscuring price competition by facilitating bait-and-switch tactics.



Recasting is the term used for the process of adjusting the loan arrangement.

Repayment Plan


A repayment plan is a new plan outlined for you to repay the loan on your home. It includes provisions for all the missed payments and fees including the fees associated with foreclosure.

Short Sale


Say your commercial property is worth $4,000,000 on today's market but your loan amount is $4,500,000. Say you get an offer for $3,500,000? The lender may forgive the difference. This is known as a short sale. The new buyer will most probably make a deal with the lender to buy the property at a discounted amount. Then the new buyer will show the bank how much money it will save the lender (because of other costs such as foreclosure expenses). If the lender agrees, then you will have a short sale. The bad news is that the money goes directly to the lender, not you. You walk away with nothing including the equity.

Truth In Lending Act ("TILA")


The Truth in Lending Act (TILA) of 1968 is a United States federal law designed to protect consumers in credit transactions, by requiring clear disclosure of key terms of the lending arrangement and all costs. The statute is contained in Title I of the Consumer Credit Protection Act, as amended (15 U.S.C. ?? 1601 et seq.). The regulations implementing the statute, which are known as "Regulation Z", are codified at 12 CFR Part 226. Most of the specific requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of TILA usually refers to the requirements contained in Regulation Z, as well as the statute itself.



A work out agreement is the lender and the borrower agree to work together to reduce the outstanding lean principal and extend the maturity date of the loan. A work out agreement is usually used where there is a potential to make money on the property in the future by allowing the current owner to retain the property and both share in the income of the property. You usually see work out agreements


Short Sale / Short Payoff


Properly Negotiating Short Sales And Short Payoffs


This is only intended as an overview which will give you cursory understanding of short sales and short payoffs. There are many other factors and conditions which affect these foreclosure alternatives and should be discussed thoroughly with professionals. It cannot be stressed enough to seek the assistance of experienced professionals in these matters because the lender certainly has professionals on their side, and unless properly advised and professionally negotiated, the borrower can be "taken advantage of" and end up in a worse financial condition than a foreclosure would cause. 


Loss Mitigations LLC (LM LLC) has an outstanding track record of successfully negotiating and facilitating short sales and short payoffs with the lenders of their commercial property owner (the borrower) clients. First, we will discuss the definitions of short sales and short payoffs.

A short sale is a mutual agreement between the lender, the borrower and a third party. The lender agrees to accept a reduced outstanding principal balance on the note, and the property is sold by the borrower to a third party who has their own funding source at this agreed upon lower price. This has the net effect and beneficial results for all parties concerned by:


·           Eliminating the note and property (and in some cases, where the lender has deemed the property a "toxic asset") from the lender's portfolio

·           Relieves the property owner from further financial obligations to the lender and foreclosure

·           The borrower can "walk away" from the property (but will no longer own it and must vacate), and

·           The third party has acquired the property at a price below the original note balance and possibly substantially below the current market value.


During these hard economic times, both borrowers and lenders are finding foreclosures can be more costly than negotiating a short sale. The lender may make the determination it is in their best interest to agree to a short sale when the following occurs:


·                     A borrower can no longer afford to make their mortgage payments and The lender has analyzed their financial position with the subject property, and that analysis indicates their total costs of a foreclosure, plus the carrying costs to keep the foreclosed property as Real Estate Owned (REO) is greater than taking a loss on the property itself.


At the present time, lenders are finding they have more illiquid assets (real estate due to foreclosures), and less liquid capital (cash and equivalents) in their possession. Foreclosures are adding property to lender portfolios in the form of REO which they do not really want or need. At the same time, the lender less liquid capital available, due to borrowers being unable to make their payments. Both these conditions are occurring at alarming rates. This is essentially a "double-whammy" to the lender's overall balance sheet.


Although both the lender and borrower have agreed to the short sale process to avoid a costly foreclosure (and all the hefty fees, costs and charges associated with it), and a negative credit report impacting the borrower, the agreement does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency. Only through proper professional negotiations can the negative impact against the borrower be avoided. Here are just a few of the negative ramifications of a short sale.


A short sale is one of many alternatives to a foreclosure, and is a type of settlement. As such, they can potentially adversely affect a person's credit report if not properly and professionally negotiated. The negative impact may be less than a foreclosure, but in some cases, the effect is the same. Similar to credit entries (except for bankruptcy), the short sale itself does not show up on a credit report, however deficiencies and remaining outstanding debt to the lender will. This negative impact can be waived through proper negotiations by a professional which will be covered later. Lenders, for the most part will not forgive the remaining loan balance, and may seek additional remedies to recover their losses and amounts still owed, especially if the borrower has signed the note as a guarantor on the loan.


This is called a recourse note, which obligates the borrower (guarantor) PERSONALLY, to pay the note in the event the property (typically owned by a corporation or LLC) does not make the payments. Think of it this way. The guarantor on a commercial note is similar to a co-signer on an automobile loan. This recourse affords the lender additional remedies to obtain payment for deficiencies which may exist related to the finalization of the short sale. Furthermore, it is possible for a lender to omit updating mortgage balances to a zero balance after a short sale. However, willfully misrepresenting information on a credit report can constitute libel in some jurisdictions, and lenders may be sued in civil court for engaging in this behavior. Nonetheless, this still occurs more commonly than one may think.


CNBC has reported some lenders have been accused of engaging in fraud during the short sale process. The fraud involved lenders in a second lien position demanding "kickbacks" in the form of cash payments from the borrower and/or real estate agent which were not disclosed anywhere in closing documents and statements.


By definition, all short sales will have an outstanding balance known as a deficiency balance. This is the difference between the short sale amount, and the outstanding principal balance prior to the short sale process, as well as any other costs, fees, charges, etc. There are laws which govern the rights of a lender to seek financial remedies against the borrower for the deficiency balance, and they vary from state to state. Some states are considered "recourse" states, while others are considered "non-recourse" states. Essentially, a recourse state will allow a lender to seek financial remedies against the borrower, and in non-recourse states, it is not allowed. Here is just one of many points which MUST BE PROPERLY AND PROFESSIONALLY NEGOTIATED.


Unless the lender specifically waives its right to seek financial remedies against the borrower for a deficiency, the borrower is at risk of a deficiency judgment. A borrower needs to be aware of all the risks, the procedures and ramifications of a short sale, especially protecting against a deficiency judgment. If a borrower was not properly represented during the short sale, and once completed and finalized, one of the only remedies a borrower can use is a Chapter 7 bankruptcy as a possible remedy to eliminate the risk of the deficiency or discharge the judgment itself. A professional negotiator will make sure the lender has waived their rights to seek a deficiency from the borrower.


In the event the lender waives their rights to any deficiency through proper negotiations, an additional "can of worms" can be opened. Since the lender has waived their rights to seek financial remedies against the borrower, the lender may issue a 1099 to the borrower in the amount of the deficiency. This allows the lender to essentially pass their loss onto the borrower as a financial gain in the form of 1099 income. This is a VERY negative consequence for the borrower, in that, there is now a TAXABLE event which involves the government, namely the IRS, and not the lender. The borrower will essentially be paying taxes on "phantom income," income they never really received, but now owe the taxes on this sum. A professional negotiating firm will also make sure this will not occur and make it clear in the written agreement for the short sale.


Now that you have a little knowledge regarding short sales, by no means has this short presentation included everything on the topic. We will now move onto short payoffs. A short payoff is very similar to a short sale with the major difference being that borrowers themselves are purchasing the note at a reduced/discounted price instead of a third party. The borrower will keep the property, however they must obtain financing from another lending source. This is not the same as a refinance because the original principal balance is not being financed, but rather a discounted negotiated and agreed upon price. Think of it like this. The borrower is buying their own note from the lender at a discount. The note and property are no longer part of the original lender's portfolio. This is a benefit to the lender in that the lender does not wish to carry the note for this property any longer, needs to increase their liquid assets and in some cases, the lender has deemed this property as a toxic asset.


All the same negotiations as stated in the section above regarding a short sale apply with a few minor differences, and must be performed in the final written short payoff agreement. There are many other ramifications which need to be negotiated, however the three (3) most important are:


·                     The deficiency

·                     Adverse / negative reporting to the credit bureaus

·                     The 1099 event


At the present time, LM LLC has seen more lenders willing to negotiate short payoffs as a means to eliminate distressed properties from their portfolios and avoid the high cost of foreclosures they incur in doing so. In recent months, short payoffs have become a "first choice" for lenders in commercial property workouts, more so than renegotiating the notes for lower monthly payments to the lender from the borrower. This is primarily due to the fact lenders are looking to "clean up" their balance sheets, eliminate troubled commercial properties from their portfolios and take advantage of the "write-down" provisions afforded to them currently, especially before year end.


LM LLC has successfully negotiated all the above, and has the experience to serve their clients for the best possible outcome in these, and other viable workout solutions for commercial property owners. LM LLC recommends a commercial property owner seek ANY experienced professionals, such as LM LLC directly, or other proven and accomplished firms in negotiating commercial paper, attorneys for the legal aspects and possible court activities which may have commenced during the lender's actions regarding the property, rather than becoming paralyzed into inactivity.


You MUST realize this is a commercial note and not a residential property mortgage. The negotiations, strategies and tactics are completely different between the two, and for the most part, should not be attempted to be done on your own, unless of course, you do have the expertise, experience and knowledge required to negotiate commercial notes. The lenders all have professionals in their corner, and so should you! LM LLC wishes to let you know, as a commercial property owner, you do have MANY options available to you, and all is far from being lost. Help is available to you.


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