A New Challenge In Bank Workouts

Negotiating a workout with a bank is now more difficult than ever but for the wrong reason. Because of the glut of non-performing loans, foreclosures and bankruptcies, the workout departments are inundated with far too many clients that need workout attention then they can possibly handle. Things are so backed up with so many banks that sales are being lost because there is no one available to talk with.

This is a serious impediment to working debt issues out now. I am often forced to have counsel send a threatening letter to either the loss mitigation department, the workout department or the lawyers representing the bank, threatening the bank with damages if they cannot deal with a proposed closing or sale in time for the event to occur, prior to the foreclosure. I have had a Purchase and Sale offer in hand from a qualified buyer yet could not reach a workout officer in time to convince them to postpone the foreclosure while we explore the value of the sale. That’s sad. Actually, it’s the height of inefficiency and verges on negligence and is certainly a potential claim for breach of their fiduciary responsibility. Yet, it is currently the state of the industry and is likely to get worse before it gets better.

There is little I can say about it other than to disclose this issue and recommend an early use of your lawyer for the sole purpose of getting the bank’s attention, getting in front of others waiting in line and getting the results you need. I find I must resort to a threat just to get a workout person on the phone, and the threat must be real with a lawyer’s letter and follow-up calls.

Do not wait patiently for your workout number to come up. It’s not a deli, it’s your life. You must become aggressive and proactive, and this is a good use of your attorney. Call him now if you are still waiting for a response from the bank.