What are typical non-foreclosure default mitigation options and considerations for commercial property?
The commercial loan workout process invariably requires a commercial loan audit of the commercial property’s books; meaning the business plans, lease agreements, tenant affidavits, (if any) construction documents and development and construction financing documents, as well as the title, survey, environmental, engineering and demographic reports of the property and other relevant documents required to accurately appraise and assess the ultimate viability of the property. Lenders should order an appraisal and examine the property market conditions in order to determine whether the performance of a particular collateralized asset would get better or worse in the future, and whether the properties would be eventually sold at a higher price or a lower price. Because the property market conditions ultimately affect the possibility of the borrowers regaining financial solvency through either improved cash flows and/or profitable sales of the properties, the higher rental growth rates in the
