Thousands of commercial mortgage loans worth north of $200 billion will have to be re-financed or paid in full in the coming months, giving business and commercial property owners and the banks that hold these loans some major anxiety.
/EINPresswire.com/ February 4, 2011 – Fredericksburg, VA – (http://www.smart-business-financing.com) Listen closely. The faint ticking in the background of the jubilant, media-fueled celebration of America’s statistical economic recovery is yet another mortgage time bomb set to explode in our faces and ruin the party. Much has been written and said about the continued problems in residential real estate arena, but the destructive force of defaulting commercial mortgage loans and evaporating equity will soon tear through the heart of the fragile economy, inflicting severe damage throughout the country – and beyond.
In a recent report, the credit rating agency, Fitch Ratings, said that 30% of commercial mortgage-backed securities loans set to mature in 2011 do not pass their refinance test. Another credit rating agency, Moody’s Investors Service, said recently that although the commercial real estate markets are making their way toward recovery, most still have not reached a point of stability.
Until now, many commercial property owners have been spared the pain of foreclosure because, with a wink and a nod, banks have been quietly extending performing loans for properties that have lost much of their value. Others are in technical default, but to avoid recognizing losses and taking possession of property they will struggle to maintain and sell, their banks have not yet foreclosed. The result? Imminent foreclosure hangs over the heads and darkens the future for many thousands of American business owners.
Mike Lieber, Smart-Business-Financing.Com contributor and founder of the 13-year commercial finance company, AEGIS Financial Solutions, Inc., says this game of “extend and pretend” has about run its course.
“For the last 18 months, the bankers have swept this problem under the rug. To preserve capital and avoid the wrath of regulators, they’ve been stretching out loan maturities and allowing below market interest rates for their best customers,” he says. “Kicking the can down the road can’t continue forever. And it won’t.”
Lieber says that there is plenty of help for commercial property owners in trouble. Non-bank, or alternative commercial mortgage lenders offer flexible loan programs that can help borrowers refinance when their bank refuses to extend a ballooning mortgage. For those whose maturity date has already passed, leaving them in technical default and under threat of foreclosure, hard money commercial loans can provide relief and buy time to craft a permanent solution.
Alternative commercial mortgage lenders are easily found on-line by searching for terms such as “commercial real estate mortgages,” “commercial hard money,” “commercial mortgage brokers,” and “hard money commercial loans.” Local business networking organizations are also a good source of referral, and in many instances, the bank that holds the maturing loan will be able to recommend alternative providers that have helped other customers in similar circumstances.
Lieber advises commercial property owners in trouble to interview several providers with the goal of finding one who specializes in working with borrowers in distress, with the resources and competence to attack the problem at hand.
“Look for a company that can offer expert counseling, one or more loan options, and a smooth process.”
About AEGIS Financial Solutions, Inc.:
Since 1998, AEGIS Financial Solutions, Inc. has been helping people solve financial problems and get money when they need it most, using the vast resources of the non-bank cash flow industry.
Mike Lieber, President
AEGIS Financial Solutions, Inc.
88 E. River Bend Road
Fredericksburg, VA 22407
PH: (540) 548-2270