Things Can Change Quickly
Crossroads Credit and Portfolio Management LLC was successfull in assisting a client obtain a reduction in their non preforming loans by 30% and a reduction of their past dues loans from 4.45% to 1.49% in just 60 days! How was this achieved? Sound banking and workout principles. We worked out the credits to provide the customer with relief, the bank with a better cash flow and collateral. Proof that things can change quickly!
Spec House Recovery with a Little Ingenuity
Residential contractor folded offering a deed in lieu on two spec houses, one complete the other 70% complete. Both loans were full advanced with numerous trade payables outstanding. We opted to institute a friendly foreclosure in which the borrower waived its hearing rights. Once possession of the property was obtained, the bank marketed the completed property which was sold for recovery of full balance and fees. As is offers on the incomplete house would have resulted in a $200M loss. We received approval from Bank management to engage a general contractor to complete the other spec house. Terms were a 50/50 split of profits from sale. Ultimately, the Bank realized a $30M profit.
Getting Creative to Solve Title Issues
There were five loans secured by doublewide mobile homes and land. There were recorded lease purchase agreements in lien position ahead of the Bank. One home was occupied by the original tenant under the lease purchase agreement. The whereabouts of the other tenants were unknown. Our attorney advised us to proceed with a costly, time consuming judicial sale in order to close out the lease purchase agreements in order to have clear title to the properties. We queried the attorney and found that these tenants they could sign their interest in the property to the Bank. A search for these individuals was successful in locating 4 of the 5 tenants. A token payment was made for them to deed their interest. he Bank saved thousands of dollars in legal fees.
Look Before You Leap
The Bank was $250M in second position on raw land in a growing area. The first was $400M. Although the tract was four acres, the appraisal indicated only .5 acres was buildable to due to wetlands. Property was selling for $600M/acre. This looked like big loss. We did a physical inspection of the property and noticed the high water mark for the wetlands was well down the slope on the property. An inquiry with the county planning dept and a few conversations with an engineer familiar with the site revealed there could be as much as 1.8 acres buildable. The Bank foreclosed and the property was sold at almost $200M profit.
The Research will Save You
The Bank is exposed $100M in second lien position on five residential investment properties in a declining area. Physical inspections revealed most of the properties were occupied but, they were in fair to poor condition. The value was not there to risk the expense of foreclosure. However, we searched tax and deed records which indicated the properties may have changed hands without paying off our lien. This evidence justified the expenditure for title searches to confirm our suspicion. Three of the 5 houses were out deeded and the Bank was in first position with strong title claims. The title companied paid the in full.
Get the Guarantors Involved
$975M exposure on 20 rent houses that are being mismanaged. The managing partner misappropriated the rents letting the houses fall in disrepair and running off the tenants to less than 50% occupied. A foreclosure would result in a six figure loss for the Bank. We called the non-managing partner who was also a guarantor. Once we explained the Banks position and his exposure, he was forced to take action. Bank management agreed to refinance the properties for the guarantor under a different entity if he could take possession. His partner was compelled to deed him the properties and the Bank averted a large loss.
In each of the above referenced cases Crossroads Credit and Portfolio Management LLC was able to assist our client Bank from experiencing significant losses. In each case the Bank’s management would have gone in a different direction had Crossroad Credit and Portfolio Management LLC not been involved.
