Special Servicers to Borrowers: Buh-Bye, Modifications

During the RealShare Distressed Assets “Special Servicers Power Panel,” produced by Real Estate Forum and GlobeSt.com, it was very clear that loan modifications are fast becoming things of the past.

Why the turnaround? Are servicers becoming more selfish? Not necessarily – but they are becoming fatigued. One thing they’re getting tired of is borrowers who are demanding modification without wanting to give back.

This is not to suggest that all modifications have gone the way of those clichéd terms from 2008; toxic assets and “Wall Street to Main Street.” The panel said there were times during which modifications might be called for, especially if the sponsor is a solid one, the asset a quality one and enough capital is on hand to effect an improvement. If the servicers have a level of trust and a good relationship with the borrower, modifications are also possible. But the servicers were adamant that the free ride for shifty or unsophisticated borrowers was over.

GlobeSt.com - Special Servicers to Borrowers: Buh-Bye, Modifications - Daily News Article