06. Full Service RV ParkSITUATION:
The LLC owned and managed a fully serviced landscaped RV park. The loan originated in 2006 with inflated valuations, a ten year term, and high defeasance penalties. Instead of experiencing the high rates of income expected, revenues were unable to keep pace with operating expenses and debt service since early 2007. Consequently, the property had fallen into arrears and subsequent default. Operational income has been negative since 2007.
Despite managements' concerted efforts to keep the property afloat; property devaluations, decreasing consumer spending, and a bleak RV Park rental market all compounded the property owner's inability to stay current on its mortgage. Additionally, it was alleged in foreclosure proceedings by the note-holder that a breach of the guaranty agreement had occurred, thereby creating personal liability for the guarantor. Arrearages on the note totaled $960,037 which included principal and interest payments, default interest payments, escrow and reserve account arrearages, and a late charge.WHAT WAS DONE:
The mitigation team was able to successfully negotiate a payoff at par and secure a waiver of guarantor's liability. The Team's aggressive negotiations resulted in an agreement which successfully waived defeasance and arrearages, in addition to waiving the borrower's liability for large penalties and default interest. This negotiated purchase and payoff ended the foreclosure proceedings and facilitated a sale of the asset.05. Commercial Property Partnership 07. Commercial Shopping Center