Lender Solutions

Lenders today have high numbers of noncurrent loans for residential real estate, land development and construction financing. In coping with the dilemma of burgeoning distressed debt, lenders typically employ one of three main strategies:

Restructure weak credits while trying to delay write-downs;
Try to sell some of these loans to private or institutional investors; or
Accelerate their real-estate-owned (REO) sales, trying to avoid overly steep discounts (particularly on large undeveloped land parcels and stalled housing tracts).

Bull Free Solutions stands ready to help lenders with any of these.

In connection with the first strategy, banks may be holding significant amounts of paper for homebuilders who are barely scraping by. Some of these homebuilders will fail while others might be fine if extended a bit of financial reprieve. The difficulty comes in knowing when it is time to restructure loans versus pull the plug. Bull Free Solutions can provide the information lenders need to make the right decision.

As noted on other web pages of this website, our work in corporate turnaround with underperforming homebuilders and developers normally begins with a detailed assessment of a company's financial condition and its prospects as a viable candidate for turnaround. The same assessment protocol can be of inestimable value to our lender clients who wish to reevaluate risk associated with loans that may still be performing, but that promise to go bad if a company's operations are not restructured. As noted elsewhere, it includes a rigorous examination of:

a company's cash flow and balance sheets;
the window of time remaining before funds are exhausted;
level of support and forbearance expected from creditors, investors, employees and other stakeholders;
availability of additional capital from loans or equity investment;
market strategy, pricing, purchasing, systems, procedures and production;
profit contributions by community, division, product line or other meaningful segments;
redundant or underutilized assets; and
effectiveness of the company's management team;

Armed with results from such an assessment, lenders can determine with confidence whether solutions might be found to quickly rescue and revive troubled debtor companies to safeguard the lender's already substantial investments in them. Alternatively, our assessment may reveal that the time is now to take immediate charge of assets and plan asset disposition strategies.

With respect to the second strategy, Bull Free Solutions brings together the resources of a large network of commercial lenders, investment funds and financial experts in arranging sale of non-current loans to these entities.

The third straegy of accelerating REO sales is facilitated by our real estate arm (Trans-USA Realty). Trans-USA can successfully dispose of "tough to sell" REO holdings (including single-family homes, condo-conversions, damaged properties, unfinished projects and holdings that would be better suited by bringing those properties into marketable condition. We work to secure loans and complete the projects at maximum yield. More importantly, we work with our clients and with local experts to identify and implement appropriate solutions with minimal expenses for our lender clients.

The choice of which of the above three strategies to employ depends upon the unique circumstances of each case. While most lenders would prefer to sell properties this year rather than incur tax liabilities and other costs as they wait for the housing market to rebound, that strategy may not be the right one in all cases, especially when the asset is large involving multiple lots, condos and finished or unfinished homes in a single development location. Depending upon geographic location and local market conditions, engaging in a conventional sales strategy with new marketing and a new on-site sales team from Bull Free Solutions can dramatically reduce losses that the lender would suffer by using alternative strategies such as the sale of distressed paper, pre-foreclosure.

Still, with roughly one in seven of all homes for sale in the United States being foreclosures, one cannot expect price declines to start reversing anytime soon. As a result, some lenders are turning to public real-estate auctions, to quickly sell their REO holdings receive some cash and move on! Trans-USA Realty has an auction staff trained to obtain the very best price possible for our lender clients during these events and we work hard to deliver a big crowd and sales at prices in excess of expectations.

If it appears that auctions will not get north of 80 cents on the dollar for your distressed assets, Bull Free Solutions and Trans-USA can often locate developers and/or investors interested in bulk purchase of raw land or stalled projects (including condo-conversions). We also offer services that will sell out entire subdivisions retail, through conventional sales methodologies.

Trans-USA Realty is able to sell REO's aggressively in such situations because our on-site operations benefit from centralized web-based and call center telemarketing functions. Finally, because of that centralized support, we can also dispose of your geographically disparate "one-offs" (i.e. scattered resale homes and lots which may currently suffer from lack of a coherent marketing strategy). For further detail on Bull Free Solutions' REO Solutions, click here.

In these difficult times for residential real estate, lenders rightfully are paying closer attention than ever to mitigating losses on their REO properties. The selection of an outsourcer for the disposition of the REO properties is critical to success in that endeavor. The multi-disciplined approach of Bull Free Solutions allows for a true one-stop shop for lenders seeking outsourcing to cope with burgeoning non-performing assets and difficult loan resolutions. Most often our fees are entirely contingent upon our success, so that we partner with our clients in the outcome.

Call Bull Free Solutions today at (352) 978-9864 or click here to set up a FREE initial consultation.