Commercial Loan Modification Underwriting Timeline

Many commercial real estate owners have questions about exactly how long the commercial loan modification takes from beginning to end.  The following commercial loan modification underwriting time line should help people understand exactly how the process works.   Please remember that the chronology below is just an example of an average commercial loan modification and the practices may change from lender to lender and even within the same organization depending on the size of the loan.

1. Research and Underwriting
   1. File is submitted and reviewed
   2. Collection of all required documents (additional documents may be requested)
   3. Notice of appearance presented to Lender
   4. Establishing Lender guidelines for submittal
   5. Financial Reconstruction of File (Present Value, Market Value, Stabilized Value)
   6. Market Analysis, comparable sale, rental rates, velocity study
   7. Legal department review of Note, Mortgage, Deeds (Legal Sufficiency)
   8. Creation of initial workout package
2. Delivery of Proposal
   1. Submittal of initial package to Lender
   2. Receipt Confirmed and verified
   3. Review with Special Asset Manager/Loan Officer
   4. Request for comments
   5. Review of comments and counter proposal if necessary
   6. Request modification/workout letter terms sheet and commitment
3. Finalization of Modification
   1. Lender approval
   2. Review Lender modification documents
   3. Present documents to client with recommendations
   4. Present modification documents to Lender with comments or executed
   5. Receive Lender acknowledgement and recordation if required
   6. Case is closed and electronically stored.

The anticipated time between intake and settlement is usually between 60 and 90 days with the majority of cases falling somewhere around the 60 day mark. Notices of Default (NOD), Sales Date Notices, and other judicial proceeding can substantially shorten the time we have to react therefore the refund policy at the point is void as is the rescission period.

If no judicial action has been taken and we are unable to obtain a modification for the client the entire fee will be refunded to the client less the $3,500 research and processing fee. All monies not due and owing will be escrowed and the client will be provided an “escrow letter” indicated where the money is escrowed and who is holding the escrow typically we have our attorney hold it in a local commercial bank.