Although many hotels are almost back to full capacity, many still face delinquency as a result of the impact from the COVID-19 pandemic. Many small-to-medium lenders that have never enacted a foreclosure have found themselves weighing their options. When foreclosing on a hotel, it is crucial to start by gathering key information about the specific property.
It is common for lenders to seek alternative resolution options, including selling the loan, restructuring the loan, or requesting a deed instead of foreclosure. Pursuing these options are often motivated by the value of the collateral.
If the lender believes the property has future value and wishes to pursue a foreclosure, having a foreclosure servicer like Total Lender Solutions is the best way to protect lenders from compliance blunders and to enact the foreclosure within the best timeline possible.
The Difference Between Hotels and Other Commercial Real Estate Foreclosures
Hotel foreclosures are unique to other commercial real estate property foreclosures. Hotels come in a wide range of ownership arrangements and business models, making them specifically difficult to coordinate during a foreclosure. A small, luxury boutique has different considerations from an extended-stay motel.
Independent brands will have different requirements from a franchise. Understanding the hotel’s structure determines the value of the collateral, the future viability of the business, and how a foreclosure will play out.
Foreclosing on a hotel is additionally unique because a hotel’s architecture is essential to its usefulness, and its staff is critical to its value. Hotels are not easily converted to other types of commercial real estate properties, meaning that lenders require tactical strategies for their properties before enacting a foreclosure.
Where to Get Started When Foreclosing on a Hotel
Foreclosing a hotel is particularly difficult because lenders must assess the hotel’s business structure — this includes a thorough review of the loan file. Failure to properly understand the stipulations of the loan may result in financial loss from punitive or actual damages later in the foreclosure process, so lenders must have a partner that can assure that all loan documentation is complete and that the borrower’s financial information is current.
A foreclosure service like Total Lender Solutions employs a team of commercial real estate foreclosure professionals to the aid of small-to-medium lenders hoping to make crucial decisions about the state of their collateral properties. Calling your foreclosure partner is the first step to starting your foreclosure process.
Keep Your Team Educated About Foreclosure Law
At Total Lender Solutions, we advocate for lenders looking to maximize recoveries on defaulted loans. For over 15 years, our team of highly experienced real estate professionals and legal experts has transformed complicated processes into clear resolutions for institutional and private lenders.
Total Lender Solutions acts as a vigorous extension of your team to provide comprehensive solutions and seamless communication, from pre-foreclosure and notice of default to the final sale phase. Our dedication and persistence when it comes to the foreclosure process ensures that our clients feel confident in reaching a successful outcome. Contact us today.
