You invested in commercial property because it seemed like a profitable endeavor that would widen your portfolio, provide steady cash income, and expand your tax advantages. You may even be a business owner who invested to own and operate their business property.
Investing in real estate or starting a business is always a gamble. If your investment went south and you find yourself facing commercial foreclosure, or if your business is suffering, you may be wondering what your next steps should be.
Is commercial foreclosure the only viable solution to your predicament? Are there any alternatives before you lose your property and suffer the financial blows of foreclosure?
Hoegen & Associates, P.C. has helped commercial real estate investors and business owners face and come out the other end of foreclosure successful, stable, and in good financial standing — and we’re ready to help you!
If you’re a small business or commercial property owner in Northeastern Pennsylvania, here’s everything you need to know about commercial foreclosure and creative alternatives.
Have you been struggling to make the mortgage payments on your commercial property? If you haven’t yet received a threat of foreclosure from your lender, but the missed payments are piling up, now is the time to act!
You may be able to restructure your loan and make your mortgage more affordable through a process known as a loan modification.
Depending on the circumstances of your unique situation, your lender may agree to any of the terms:
- Waive late fees
- Decrease the interest rate
- Reduce the monthly mortgage amount
- Increase the lifetime of the mortgage
- Repayment plan
A loan modification can also entail a combination of any of these terms. In Pennsylvania, you are not required to work with an attorney to make a loan modification happen — but it is highly recommended! A commercial attorney can analyze your finances, come up with a plan, gather all the documentation you will need, and help you make a strong enough case to avoid foreclosure.
Commercial Loan Workouts & Forbearance
Was your commercial property damaged? Have you recently suffered an illness or hardship?
No matter your situation, your mortgage lender may be able to agree to something known as forbearance. Through a forbearance agreement, the lender agrees to pause or lower your mortgage so the borrower can afford the monthly payments.
Through forbearance, the borrower ultimately cures the default by eventually repaying delinquent payments. However, the lender can resume and move forward with the foreclosure if the borrower cannot fulfill the terms of the forbearance or a loan modification.
If you’re considering requesting a forbearance, a commercial attorney can help you work out a commercial loan workout and forbearance solution with your lender.
Commercial Short Sale
Are you willing to sell your commercial property or move your business to another location? Through a process known as a short sale, you can spare yourself the consequences of foreclosure and put your commercial property up for sale to satisfy the debt to your lender.
A commercial short sale is a negotiated settlement between the borrower and the lender. For the short sale to occur, the property must be less than the total outstanding debt amount tied to the loan.
Before you begin talks with your lender, consult with a commercial attorney who can help you make your case. As the borrower, you’ll have to prove that you are no longer able to make the mortgage payments and have no assets that can satisfy the outstanding debt. Your commercial attorney will also help you settle the contract and close on the property.
Understanding Commercial Foreclosure
Many lenders prefer alternatives like forbearance agreements and short sales to foreclosure. After all, foreclosure is an arduous, time-consuming, and expensive legal process that may not yield monetary results as quickly as the other measures previously discussed.
Most borrowers also don’t want to find themselves facing foreclosure with dwindling options. Foreclosure can damage your credit and jeopardize your ability to get another mortgage in the future; not to mention, it is stressful, and it can have negative impacts on your livelihood.
Consult with a Commercial Lawyer
Are you facing foreclosure? Do you want to try to work out a solution with your lender?
Whether a foreclosure is imminent or you have time to explore your options and prevent a foreclosure from happening, the attorneys at Hoegen & Associates, P.C. are ready to stand by your side. Contact us today!