On Tuesday June 7, 2011, at 2 p.m. ET, The TASA Group, Inc., in conjunction with commercial mortgage financing and appraisal expert Bruce Coin, presented a free, one-hour, interactive webinar, Commercial Mortgage Lender and Borrower Foreclosure Issues, for legal professionals.
Numerous commercial mortgage defaults and bankruptcies have occurred and will continue to occur during 2011 and into 2012. The five leading causes of commercial mortgage defaults and bankruptcies are:
* A dramatic increase in the property’s vacancy in combination with a decline in market rental rates that caused the property’s value and annual net operating income to diminish significantly and in some cases by 50% or more.
* The property‘s 1st lien, 2nd lien or mezzanine financing has come due and cannot be easily repaid because the purchaser grossly overpaid for and over financed the property.
* While the property continues to have enough income to pay its expenses and even debt service, appropriate reserves were never properly anticipated and created and, therefore, the property does not have sufficient cash available to pay the tenant finish and leasing broker commission costs necessary to retain and/or attract new tenants to minimize vacancy.
* The interest rate on the mortgage increased so much, due to an existing formula, that the property’s net income cannot pay its debt service.
* Bad management, often with interests that are in conflict with ownership.
Among other items the webinar addressed:
* Lender issues to be investigated and actions to be considered when a default occurs
* Borrower issues and actions to be addressed when the potential for default is imminent
* Some special problems to be confronted when dealing with a defaulted or defaulting loan that is in a Commercial Mortgage Back Securities pool.
About the Expert
Bruce Coin has over 40 years of full time experience in the inter-related disciplines of commercial, income property financing, valuation and development. He was a co-founder and for 35 years ran Pro-gressive Mortgage Corp. a commercial mortgage banking, brokerage, appraisal and consulting firm and regional commercial mortgage loan and servicing correspondent for a number of major insurance companies. In 2007, he sold Pro-gressive to the Philadelphia office of U.S. Realty Capital, LLC.
Bruce has personally closed in excess on $1.5 billion of commercial mortgage financing on all types of income producing real estate. Structures included 1st and 2nd mortgages, construction loans, permanent loans, immediate and forward commitments, joint ventures, participating mortgages, wraparound mortgages, standbys to lend, standbys to purchase, mezzanine loans and credit enhancements. He has sold, leased, managed and foreclosed a variety of income property types. In 1970 he was instrumental in the formation of Fidelco Growth Investors, the first commercial mortgage R.E.I.T. in the Philadelphia region.
Between 1973 and 2007 he assisted a business partner with the planning, development, financing, management and leasing of two, one story office developments totaling over 550,000 s.f.
He has lectured to joint undergraduate and MBA classes of the University of Pennsylvania’s Wharton School as well as to classes of Temple and Weidner Universities. He has been published numerous times including issues of the NY Times, The Real Estate Review, The Appraisal Journal and other publications. He is an IDECC Certified Distance Education Instructor (CDEI) and has written four 7 hour, one 4 hour and one 30 hour IDECC, ARRELLO and AQB approved “on line” commercial real estate education courses.
He has provided numerous expert reports and court testimony for law firms and clients as both a plaintiff’s and defendant’s expert.
About The TASA Group, Inc.
TASA provides independent testifying and consulting experts to the legal community, within the fields of business, technology, the arts, and science. TASA experts are available locally and nationally, for plaintiff or defense. They assist with various phases of litigation, including case merit evaluation, strategy, education, research, reporting, and testimony. TASA serves law and insurance professionals, businesses, and government agencies.