Leadsnet Inc. Reports Increase in Commercial Mortgage Modification Requests

south lake tahoe, United States (IBwire.com - May 14, 2009) Leadsnet Inc., a provider of commercial mortgage leads reports that requests for commercial mortgage loan modifications has increased steadily since the company rolled out their commercial mortgage modification portal at www.commercialmodification.com.

“We have seen a steady increase in traffic on our commercial mortgage modification portal” says Ted Schmidt, President of Leadsnet, Inc. “Anticipating the commercial mortgage meltdown, we published the site in January 2009.  Since then, the volume of leads has increased steadily.  The average loan amount is about $2,500,000 and average LTV is about 80%.  Commercial property owners are using our service to find consultants that specialize in commercial loan workouts.“

The seizure of the commercial mortgage backed securities market has made it increasingly difficult to refinance loans that are coming due this year, next year and peaking in 2011.  This will lead to more defaults in the years to come as vacancies increase, rents drop and property values fall.

Earlier this month Fitch Ratings reported that commercial defaults surged by 48 percent last quarter to $23.7 billion, and that this quarter will see even more delinquencies among commercial mortgages. During the peak of the bubble, commercial underwriting standards were loosened to feed demand and now the lenders are paying for the relaxed guidelines.

As mortgage holders and servicers foresee the coming crisis with the inability to refinance, they will be more likely to want to negotiate a modification to avert greater potential losses through foreclosures.

The Federal Reserve is also making efforts to reduce losses on commercial mortgages by including CMBS in the Term Asset-Backed Securities Loan Facility, or TALF.  It will take some time for this program to get off the ground since commercial lenders have not been making loans designed to be bundled into CMBS, since that market seized up a year ago.