Increase of Multifamily Apartments Foreclosing in Texas

If you are a lender with a borrower who has defaulted on a loan secured by land, you may wonder what options you have. Land can be foreclosed on, even if there is no structure on the land. Land can be agricultural, vacant urban plots, or commercial plots with environmental stipulations. Many real estate investors may add a land trust to their investments to diversify their assets. Additionally, land trusts are often more complicated to foreclose than traditional commercial real estate. A trustee partner with a professional understanding of land trusts and foreclosures is the best partner for lenders dealing with delinquent borrowers.

In Texas, multifamily homes are facing increased delinquency and foreclosure rates. For lenders with a portfolio of multifamily dwellings in Texas, preparation is crucial for the upcoming months. Many of the lingering effects of the Covid-19 pandemic are only now beginning to rear their heads. The foreclosure of 3,200 units by the Arbor Realty Trust due to the delinquency of the Applesway Investment Group in Houston is predicted to be the launching point of more multifamily apartments foreclosing in Texas. Already, more borrowers are facing foreclosure.

For more than 35 years, Total Lender Solutions has served commercial lenders in nonjudicial foreclosures, reconveyances, and UCC sales. We keep lenders educated about foreclosure law so they may face the incoming increased rate of foreclosures.

Related Article: Business Foreclosures On The Rise: What Lenders Need to Know

Reasons for Increased Multifamily Apartments Foreclosing in Texas

Increased Interest Rate: The pandemic saw an increase in loan servicing on Class A apartments, which caused investors to seek out Class B and C units, which increased cap rates to those of Class A. Now, loans on Class C apartments that were bought at the top of the market during the pandemic are falling into delinquency due to rising interest rates.

Capital Expenditures: Many borrowers that find themselves with Class C units in their portfolio are now finding themselves with apartments with similar cap rates to Class A apartments, and yet are finding that these apartments are impossible to keep occupied and maintained at a profit.

Government Policies: The Texas eviction moratorium made it impossible for borrowers to evict those who are behind on their rent, making it harder for them to receive income and pay their bills. Many borrowers are facing delinquency as moratoriums are set to lift nationwide. 

If you are a lender facing potentially overwhelming foreclosures ahead of you, a foreclosure service is the best solution to protect your assets and complete the process effectively.

Related Article: How Bank Closures Impact Commercial Real Estate Foreclosures

Foreclosure Considerations for Texas Commercial Real Estate Lenders

You can save time, protect your assets, and avoid the steep consequences of failing to abide by state compliance by seeking a foreclosure expert as a partner for your commercial real estate loans. A foreclosure specialist can help you with the following:

  • Gather Documentation: A foreclosure partner can walk you through the complex ownership architecture of your real estate assets and gather the documentation you will need in one place.
  • Seek Alternative Resolution: A foreclosure partner can let you know if your alternative resolution options are a viable way to resolve your delinquencies, and can aid you in implementing those solutions.
  • Have a Foreclosure Action Plan: Your specialist creates a plan for foreclosure so that your team can concentrate on servicing its loans. Give your team the tools to complete their goals without fear of mishandling compliance laws.

Total Lender Solutions champions the cause of lenders seeking to optimize their recoveries on delinquent loans. With a team of seasoned real estate professionals and legal experts, we have been simplifying complex procedures into unambiguous resolutions for both institutional and private lenders for more than 15 years.

We act as a tenacious extension of your team, delivering comprehensive solutions and smooth communication throughout the entire process, from pre-foreclosure and notice of default to the ultimate sale phase. Our unwavering commitment and perseverance during the foreclosure process instill in our clients the confidence to achieve a favorable result. Get in touch with us today.