Mortgage loan restructuring may be the solution for a property Investor that can not meet his/her mortgage obligations due to insufficient cash flow from the property.
Such a restructuring should allow the property investor to lower his/her periodic mortgage payments through reduction of the Interest rate, granting of a grace period, and/or extension of the loan term.
However, the property Investor is likely to incur a cost for such a restructuring. For example, in exchange for agreeing to a mortgage loan restructuring, the lender may demand a percentage of any potential increases in the net operating income of the property, or additional security as a co (lea torah for the loan.
Therefore, before committing to the new terms of a motgage loan restructuring agreement, the property investor needs to carefully consider the benefits of such an agreement against the costs, within the context of his/her total cash flow obligations, as well as the appreciation and cash flow potential of not only the property under consideration, but also all other properties held by the investor, if any, within a portfolio management context.
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