Asset Management

When we are engaged in loan servicing and asset management, our goal is to optimize collection of the asset for our shareholders, investors, or clients, however we also seek to build strong working relationships with our Borrowers and to understand their businesses and/or the collateral property involved, so there is a fair, reasonable, and balanced approach.

Unforeseen circumstances and situations arise that at times makes it difficult for Borrowers to meet the original terms of their credit obligation. In those cases, including when the loan may be categorized as a “problem loan situation”, our goal is to evaluate all options and to:

  • Look at all available angles and points of view
  • Think outside of the box and use creativity to find ways to solve problems
  • Seek solutions that could create a “win-win”

Colorado Mtn Lake from MSN no reference to source givenUnderstanding that there are many micro and macro factors that can lead to a loan default, including changes in a particular market or the economy as a whole, the loss of a job or of a major client, declining asset values or the lack of available refinancing sources being just a few, we hope to create an environment where we can assist all parties as a problem solver and as a trusted advisor, always striving to treat people with dignity and respect irrespective of their situation.

There are various options that typically can be explored in the case of a matured loan or defaulted loan which may include:

  • Extension – A one or two month extension of the original / current maturity date on the loan (For example might be available if the Borrower needs additional time to refinance the debt with another lender, or is awaiting a closing on the sale of the property).
  • Loan Modification – A permanent change in the existing terms of the loan which may assist in allowing the Borrower to continue making regular payments (For example, a lower interest rate, lower payment amount, or longer amortization term).
  • Forbearance – Is a temporary change in terms. Usually involves modified payment terms or an extension of the maturity date and involves the lender agreeing not to take any legal or collection actions as long as prescribed terms or conditions are met by the Borrower. Can involve smaller or no payments for a short period of time but is typically done when there is a specific, defined end-resolution in sight.
  • Modified Arranged Plan – An arrangement to maintain the monthly payment plus pay additional amounts towards the past due balance until caught up. Typically used when the loan has become several months delinquent due to an unforeseen event that has been solved, but when the Borrower doesn’t have the resources to immediately catch up on the past due payments.
  • Short Sale – Involves a situation where the Borrower has decided they want to sell the collateral property and/or may already have a potential buyer, but the expected net proceeds of the sale may not be sufficient to cover the full amount of the debt involved. In this case the lender may agree to accept net proceeds of the sale in full satisfaction of the debt or with an arrangement to pay off the deficiency balance over time on mutually agreeable terms.
  • Discounted Pay-Off – Instances where the Borrower’s desire and intentions are to keep the collateral property and they have a means of paying off or refinancing the debt through another source or party, but which will not cover the full amount of the debt. In this case the lender may agree to accept a negotiated amount in full satisfaction of the debt or with an arrangement to pay off the deficiency balance over time on mutually agreeable terms.
  • Deed-in-Lieu of Foreclosure – A transfer of title to the property to the lender instead of the lender instituting a foreclosure suit or action, saving both parties legal expenses and avoiding public notice and publication of the default and a foreclosure sale of the collateral property.

Promissory notes and Deeds of Trust / Mortgages represent legally binding contracts between the parties, and at times going through a legal collection process cannot be avoided in order to enforce the terms, rights, responsibilities, and original intent of the agreements involved.