How Mortgage Brokers Can Salvage a Deal When the Borrower Owes More than the Property will Support

1. Negotiate a reduced payoff with the current lien holder(s)

2. Ask the borrower if he has other property he owns free and clear to add as additional collateral

3. Ask the borrower if he has other property he owns with a mortgage to add as additional collateral with the lender taking a second position

4. Ask the current lien holder(s) to subordinate a portion of their note, if so they will be paid a majority of their note via the new financing

5. Ask the current lien holder (s) to accept a portion of their payoff in an unsecured note

6. Defer your brokerage fee in subordinated financing

7. Ask the borrower if he has funds to make up the difference between the amount owed and the net amount of the new financing

8. Find a individual with high risk high return capital to invest to provide a second mortgage

9. Use any combination of the above I have successfully used all of the above, and continue to do so.

Having arranged and invested in over 600 commercial loans, I estimate that 20% of the ‘dead’ deals can be successfully concluded using these creative techniques. I strongly suggest Mortgage Brokers charge additional fees when using these techniques.