We have a commercial loan from M&T Bank. It's originated by Silver Hill under its subsidiary Bayview Loan Company on Sept. 2007 and Bayview sold to M&T Bank after 7 or 8 months later. The loan is for a small MHP in NC.
Recently, our tenants are having problems with their jobs. Consequently, a few can not make their rent payments on time. Therefore, we are having a tough time making a mortgage for many months. However, we tried to make the payment on time and keep our credit intack for the possibility of refinancing the mortgage with low interests and low monthly payment in order to be self sufficient.
We called M&T Bank to consider the readjustment or loan modification possibility but M&T told us that we have to be on default status in order to be considered. So, we looked for another bank to refinance the mortgage.
However, we found out that our payoff information from M&T Bank for refinancing our mortgage was very disturbing. Terms and early payment penalties were so severe that we do not have the chance. It turned out to be our early payment penalties were over $160,000 (57%) on the loan amount of $279,237 and terms were 7 years early payment penalty plus 10 years payment penalty thereafter, which we were not aware of before the contract. There is no written disclosure we can find from the file.
I spoke with many business people and loan brokers about it but they never heard such terms.
I hired a predatory lending mortgage lawyer and he tried to resolve the problem with M&T Bank directly; however, M&T Bank told him that commercial loan is norm in that terms. Basically, M&T Bank wants $160,000 penalty if we want to refinance it or rather see the default or foreclosure on the loan.
The lawyer told me that he is not expert in commercial loan and we should consult with other commercial mortgage lawyer.
Please investigate the term predatory lending practice on these lenders. Are these terms are norm in commercial loan? Isn't there should be some kind of term restriction for commercial loans?
Hope this helps other business people be aware of their loan terms and find the right bank or financial institution for their commercial loans.
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