Monthly Archives: February 2015

Private Fund Principal Reduction Plans in Perspective: Alternative to Strategic Default or Hating-Your-House

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Tampa, FL (PRWEB) June 30, 2010

It seems the only consensus regarding the housing crisis is that recovery will be slow in coming. Home values are stagnant (still falling in many areas), foreclosure numbers are increasing, and the federal governments HAMP response is widely seen as an abject failure. These factors suggest few, if any options, for responsible homeowners to recover their lost housing investments any time soon.

It would seem the only options for those still able to pay their mortgages are to continue throwing money away into an undervalued asset, or engage in what is called strategic default, likely ruining your credit and chance for homeownership in the near future. In fact, homeowners who strategically default will be ineligible for new Fannie Mae-backed mortgages (up to seven years) and will likely face court via deficiency judgments.”

There may, however, be a third option. While the Too-Big-To-Fail banks and the Federal Government continue their painfully slow response, the private sector may offer a solution to some of these forgotten families who feel stuck between two bad choices: strategic default or hating their house.

Various private equity and hedge funds have entered the fray with clear and concise plans that can result in a win/win/win scenario. Once a large portfolio of residential mortgages from a given lender is collected, the fund negotiates the purchase of that portfolio at a discount. That discount is then passed on to the homeowner via principal reduction. The lender gets a cash infusion and avoids strategic default risks. The homeowner is rescued from negative equity, and the fund is able to profit while rebuilding the securitization market at the same time.

Given that different funds target different homeowners and private funds like their privacy, programs such as this have received minimal attention. Trinity Bay Financial, Inc., an authorized affiliate of Addvent Funding, has taken the initiative to gather as much detail as possible on the topic, and offer it to the pubic at: http://bit.ly/tbfprpdata.com.

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Salvaging the Economy Commercial Loan Restructuring

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Clearwater, FL (Vocus) July 23, 2010

As the economy stumbles along, Guardian Solutions has become inundated by large numbers of business owners with income producing commercial properties that require loan restructuring to keep their doors open.

The U.S. unemployment rate is nearly 10% according to official government statistics, but what the government fails to clarify is that these numbers do not represent individuals who are not eligible for unemployment benefits and part-time workers who would prefer to be full-time. In reality, with those factors considered, true unemployment in the U.S. is closer to 17%.

With the unemployment rate as high as it is, the last thing this country needs right now is a slew of securitized commercial property foreclosures on businesses that are employing people, said Jeramie Concklin, CEO of Guardian Solutions, a commercial loan restructuring firm that has been helping its clients avoid reaching the foreclosure stage and helping them return back into income-producing assts.

Now add to this already dismal economic situation the fact that commercial real estate industry analysts expect delinquency rates leading to foreclosures to increase further through this year and to peak in late 2011, early 2012. Moreover, Deutsche Bank estimates that around $ 2 trillion in commercial mortgages are expected to come due within the next four years.

Short of a loan restructuring, commercial property-owners may suffer the consequences of losing their income-producing asset, which subsequently will produce even more unwanted repercussions on the economy. Lending institutions will feel the effects severely if they have nonproducing assets in a market flooded with foreclosed properties, adding to even further illiquidity in the credit markets.

The logical solution is for banks and commercial borrowers to agree on a mutually beneficial modification or restructure. There are various restructuring methods a bank can take. One way is for banks to decrease their rates permanently or temporarily, which can help borrowers avoid foreclosure. A fractional drop in interest rate may eliminate tens of thousands of dollars from a property-owners annual debt burden, and potentially, save hundreds of thousands if not millions for the lending institutions because now the property in question has avoided foreclosure.

The point is to give borrowers the time and the tools necessary to stabilize the property and turn it back into a positive-cash-flow business. Doing this allows the lending institution to book the property as a Performing Asset. Another scenario is how to effectively deal with the maturation of a loan. Banks might need to extend the maturity dates on loans to push back untenable balloon payments and keep the borrower in business. By doing this, the bank is ensuring the property continues to be a performing asset, not a liability that potentially needs to be sold at auction for an amount below the existing Note.

Because of the technical and legal aspects involved with restructuring a commercial loan, many property-owners may ignore their position and accept foreclosure rather than work proactively to save their investment. Commercial loan-restructuring companies exist, however, and at times can help stressed property-owners navigate the complex procedures, negotiations and nuances associated with a successful loan workout.

Concklin added, Guardian Solutions addresses each property we represent individually in accordance with all the issues at hand. Once we are prepared with every piece of relevant information and a realistic game plan, we enter negotiations with the Special Servicer, or in some cases the Master Servicer. Our intent is to always secure the best possible terms for the client while simultaneously addressing the concerns of the lending institutions

About Guardian Solutions:

Guardian Solutions is the one of nations largest commercial loan restructuring companies and is committed to helping commercial property owners save their properties. The companys seasoned team is experienced in a variety of disciplines and able to provide customized restructuring solutions. For more information, visit http://www.GuardianSolutions.org.

Contact:

Jamie Sene

Vice President, Marketing

Guardian Solutions

727-442-8833

jvs(at)guardiansolutions(dot)org

http://www.GuardianSolutions.org

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Commercial Real Estate Has the Hotel Sector Begun Turning Around?

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Clearwater, FL (Vocus) July 26, 2010

Data from Smith Travel Research released recently shows U.S. hotel occupancy rose more than two percentage points in the first five months of this year from the same period last year, to 54.7%. However, there is no doubt that many commercial properties such as hotels remain very deeply in debt.

Guardian Solutions, a commercial loan restructuring firm specializing in various segments within the commercial real estate market, has recently helped two such hotels turn matters around despite the struggling economy.

Eventually, the hotel industry will come back, but if a hotel owner is straddled with an untenable balloon payment, or is in default because of the current economic situation, it is imperative that the commercial property owner act aggressively now to keep his property, said Ira J. Friedman COO for Guardian Solutions.

But the overall looming industry debt continues to threaten to undo any recovery the hotel segment is starting to make.

According to research firm Trepp there is about $ 5.6 billion in securitized mortgages tied to hotels coming due this year and next, and about 28% cover properties now estimated to be worth less than their mortgage balances. That makes refinancing those “troubled” loans nearly impossible without the commercial property owners contributing more capital.

Returning to the hotel industry’s boom-time highs may take several years or longer. PKF Consulting Inc., a hotel-industry analysis company, predicts U.S. average rates and REVPAR (revenue per available room) will return to their recent peaks by 2013, but occupancy won’t do so until after 2014. As for property values, HVS, the hotel and leisure research company, forecasts U.S. hotels should regain their 2006 values by 2013.

Some hotel owners may just focus on the first bit of good news they have experienced in two years (slightly improved occupancy rates) but the ones that will survive are the ones that take advantage of this uptick and use it to help restructure their commercial mortgage, and deal with the looming problem sooner rather than later added Friedman.

One group of hotel owners who were not waiting to see if things got better on their own was AllStar Investments, LLC. AllStar was able to renegotiate terms for mortgages for two of their hotel properties with the help of Guardian Solutions.

Guardian Solutions and Mr. Friedman took what appeared to be a hopeless situation for two of our hotels and turned them both around. He negotiated a discounted buy-out of the notes at approximately .60 cents on the dollar, said an AllStar Representative

But the situation is even worse for commercial property owners with hotel loans that are coming due in 2012, many of which were originated when hotel values (commercial real estate values) were much higher than today. Of the $ 5.1 billion in securitized mortgages coming due in 2012, 64.5% currently are underwater, according to Foresight Analytics. Those not generating enough cash to cover their interest payments represent 42.2% of that balance due in 2012.

Friedman added, Guardian Solutions addresses each property we represent individually in accordance with all the issues at hand. Once we are prepared with every piece of relevant information and a realistic game plan, we enter negotiations with the Special Servicer, or in some cases the Master Servicer; our intent is to always secure the best possible terms for the client and address the concerns of the lending institutions.

About Guardian Solutions

Guardian Solutions is the one of nations largest commercial loan restructuring companies and is committed to helping commercial property owners save their properties. The companys knowledgeable mediators are experienced in a variety of disciplines to provide customized restructuring solutions. For more information, visit http://www.GuardianSolutions.org

Contact:

Jamie Sene

Vice President, Marketing

Guardian Solutions

727-442-8833

http://www.GuardianSolutions.org

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