Type of the loan: Bridge Loan – Refinance
The loan was to provide necessary funding to pay off the defaulted loan, saving the multi-tenant office building from foreclosure.
This deal came to Grand Pacific after being turned down by numerous lenders. The previous loan was seriously delinquent with Notice of Default filed. The borrower worked with another lender to refinance the loan; however, after a couple months of processing, the lender turned down the case leaving the property with a foreclosure deadline approaching. In addition to the closing time constraint, the borrower is an inexperience investor with limited net worth and a history of Notice of Defaults. To top off everything, the property’s cash flow is barely enough to service the debt, and the majority of the tenants are under short-term leases with no extension option.
Despite the deficiencies, Grand Pacific believed in the upside potentials of the property. Grand Pacific was able to underwrite the loan with a high LTV in order to pay off the extensive amount of accrued interest, late charges, and other fees from previous loan. A payment reserve account was also structured to cover any shortages in the event of tenants vacating. Grand Pacific was about to deliver the deal in a timely matter in order to save the property from being foreclosed.