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The forecasts are rosy for the CRE market, but systemic headwinds still exist, making this a tough sector to bank on profits.

For years commercial real estate has been billed as the next big train wreck. So why are some investors shouting all aboard?

During the long years of the financial crisis, the American economy has been like a retelling of the Somerset Maugham story "Appointment in Samarra," in which a man unsuccessfully runs from city to city in attempts to avoid a run-in with Death -- who, of course, is one step ahead of him. Similarly, investors have now spent years dodging disaster in one area of the markets, only to find their investments coming to a bad end elsewhere.

Federal officials, from President Obama down, assure the public at every turn that our economy, though fragile, has been stabilized. Yet bank failures in 2010 are expected to blow past last year's 140 and the root cause, as Treasury Secretary Tim Geithner admitted this week, is the ongoing crisis in commercial real estate.

Economists have long been predicting commercial real estate could be the next day of reckoning for the financial markets, with a wave of defaults looming as billions of dollars in troubled loans come due in the coming months.

A congressional watchdog panel warned on Thursday that mounting commercial real estate losses could endanger the banking system and thwart economic recovery.

Luckily for banks, the commercial real estate time bomb just keeps on ticking.

First the housing market tanked, eventually sending home prices down 30% from their 2006 peak. Then came warnings that commercial real estate would be the next shoe to drop -- and that the problems could dwarf those in the residential market.

Picking Commercial Loan Modification Companies is a little bit like choosing a watermelon; it is not easy to know if it’s going to be a good one until you crack it open.

Unfortunately the economic recession has forced many businesses, large and small, into bankruptcy and this has left many apartments, houses and offices vacant. Property values have also dropped and many commercial real estate owners have seen their property drop from 30% to 50% depending on their postcode. The drop in value has been caused by the lack of demand and the difficulty in finding financing for commercial real estate. Loans of 85% the value of a commercial property were the norm a few years ago, now 60% is the new standard.

It is no surprise that Commercial Property owners are in trouble. The typical apartment building owner, for instance, has seen his occupancy levels drop by over 30% and can’t expect to refinance his property without resorting to hard money loans with their exorbitant interest rates of 10 to 20 percent, which for most business is just not a realistic option.

This situation makes loan modifications the most viable option for many commercial property owners. Loan modifications, through a reduction of interest rates, extension of loan term or in rare cases lowering of the loan principal, offer a chance of staying in business for many troubled commercial estate owners.

However commercial loan modifications do tend to be even more complicated than personal home loan modifications making many choose a loan modification company to help them through the process.

Using a professional to help you through the negotiations of a commercial loan modification can be a good idea. Depending on your experience and your background it could also be a good idea to do it yourself. However if you do choose to hire a commercial loan modification company there are a few things you need to keep in mind.

1)      Commercial Loan Modification is an unregulated industry and doesn’t require any type of license or qualification. This means that anybody can put up a sign and call himself or herself a commercial loan modification expert. This puts all the onus on the client, you, to check you are dealing with a real pro.

2)      Does the company have lawyers on their staff? This is not a guarantee of professionalism but better companies do tend to have their own lawyers on staff.

3)      Ask for references from other clients that have received successful commercial loan modifications.

4)      Check out the owners of the company’s background. What is their history?

5)      Who will be managing your loan modification? Do they have experience? A loan modification could save or sink your business. Credit scores can be seriously damaged and long relationships with banks severed. Make sure you are dealing with an experienced agent. Experience is the best recommendation but you can also ask for any other relevant qualifications like a Certified Commercial Investment Manager (CCIM) when assessing your loan modification agent.

These measures will not guarantee your loan modification success but it will increase your chances of a successful  commercial loan modification.

Related posts:

1. Shady Loan Modification Companies Told To Get Out Of Town By AG
2. Loan Modification Company Scams How to Avoid Them
3. Loan Modification Foreclosure Prevention Companies Looking For Affiliate Sale Representatives

Related posts:

1. Shady Loan Modification Companies Told To Get Out Of Town By AG
2. Loan Modification Company Scams How to Avoid Them
3. Loan Modification Foreclosure Prevention Companies Looking For Affiliate Sale Representatives

When the FDIC closed Chicago's Corus Bank last month, it may have signaled the beginning of the next shock to the banking system: commercial real estate defaults.