Wave of Foreclosures

wave of foreclosure

Millions of Americans took advantage of the payment suspension and mortgage forbearance programs both lenders and the federal government rolled out due to the Covid-19 pandemic last year. But as these emergency programs start to wind down this year, there’s anticipation that commercial real estate is facing a wave of foreclosures over the next few quarters because borrowers are defaulting.

 

For example, “WeWork, has stopped paying rent at some U.S. locations while it tries to renegotiate leases, says the WSJ.”

 

Many commercial and residential properties are still enrolled in some type of forbearance program or have deferred payments for much of last year. With these programs dwindling this fall, foreclosures can increase. In general, options for exiting forbearance vary depending on your loan type. And if you are searching for simplicity and certainty, it is not that easy. Money troubles caused by the pandemic have put us in a holding pattern waiting for answers. Make sure you familiarize yourself with your options so you know the best route for you.

 

There is an option to take part in a repayment plan. This means affording to pay an extra few hundred dollars monthly until you are caught up. Again, while many businesses and property owners are already stretched thin due to the pandemic, this is may not be a viable solution.

 

You can also pay in a lump sum, which is nearly impossible for most. This is not necessarily a resolution as most continue to face financial stress. As most do not have enough to comfortably repay the past due amount in one lump sum. Other options and solutions have not been set in stone, but the truth is, no matter what this money is still owed to your financial institution.

 

If you’re a commercial mortgage broker with a loan situation that looks impossible to refinance, consider contacting a company like Private Mortgage Finance that’s willing to make an offer to buy the note from the current lienholder, and restructure the terms with the borrower to create realistic payments afforded by the property’s cash flow. Of course, we also fund traditional refinances and commercial property purchases.

 

PMF Partners can also refinance your low loan to value commercial real estate and give you cash out to pay off or pay down other debt. Feel free to contact us with any questions, or to run any hard money type loan scenario by us. You can go to our website, click on “Request a Loan Now” and fill out the online, interactive loan application. PMF Partners are a Hard Money lender.