Special Servicers to Borrowers: Buh-Bye, Modifications

GRAPEVINE, TX-During the credit-frozen days of 2008 and 2009, when practically no one could get any kind of refinancing, special servicers were generous with modifications as existing debt matured.  There was good reason for this:  Frozen credit markets meant no money could be had, and extending the terms of a loan meant an asset could stay out of default or foreclosure for awhile longer.

That was then. 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. “There are better alternatives out there to modification,” noted Kevin Donahue, senior vice president, Midland Loan Services Inc. during the “Special Servicers Power Panel.” As a result, “Borrowers are under more pressure to come off modifications,” he said.