By Ann Hambly –


 

There is actually a fairly simple way to determine whether or not your loan qualifies for a modification. To perform your own assessment, first answer the two questions below:

 

1. What would you likely be able to sell your property for today in the open market and is that amount sufficient to pay off the current loan (without considering defeasance or other prepayment costs)?

 

2. Does your property generate enough cash flow today to pay the loan as structured?

 

  • If the answer to both questions is YES – your loan will likely NOT qualify for a modification. If your loan is maturing and you simply need an extension of time to pay the loan off, that might be considered, but an actual modification of the debt is not likely.
  • If the answer to BOTH questions is NO – you are a perfect candidate for a loan modification.
  • If the answer to question 1 is NO but the answer to question 2 is YES – you are likely a candidate for a modification of the debt (including a discounted pay off and other debt relief structures).
  • If the answer to question 1 is YES but the answer to question 2 is NO – you MAY be able to seek a payment only modification, but there is tremendous risk that the Special Servicer may simply seek to foreclose on the property.

 

If you are a candidate for a modification, know that there many types of modifications that can be considered depending on the various facts of the situation.

 

That’s where a Borrower Advocate will add tremendous value to the process by having a deep understanding of the types of modifications that the various special servicers will entertain. 1st Service Solutions is the original, 1st Borrower Advocate.