San Diego-based commercial real estate workout firm Breakwater Equity Partners saves investor equity through a creative workout process.

San Diego, CA (PRWeb) February 22, 2011 – Breakwater Equity Partners, a consulting firm specializing in commercial loan workouts, announced today the closing of a successful loan workout on a stalled twelve-story office building construction project in downtown San Diego.

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Rendering of 610 Lexington, subject of Bad Boy Guarantee law suit

With the ongoing debate about whether bankruptcies or foreclosures are easier for the market to digest, it would appear that “bad boy guarantees” are definitely limiting the number of bankruptcies and slowing the debt removal process. These guarantees, also called “springing guarantees” were initiated in the 1980s, but became more noticeable in the 1990s. They were a response to the tendency of borrowers to file a Chapter 11 bankruptcy motion just days before a lender was in position to foreclose.

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Now these small investors are stuck with big losses that parallel to TIC Investments.

IMH is a Phoenix based “hard money” lender that expanded dramatically during the real estate bubble. Its current travails, as illustrated in the following article from the Wall Street Journal, are representative of the problems facing lenders that concentrated their lending portfolios in commercial real estate. IMH was actually one of the most conservative of the hard money lenders in the Southwest. Many of its competitors, including Mortgages Limited and Landmark, have already gone out of business. During the long real estate boom many investment advisors and broker dealers were hungry for the hefty fees that they generated from the sale of the IMH securities. This is very similar to what happened with the sale of Tenant in Common (TIC) interests to unsophisticated investors. In both cases, investment advisors pushed investors to purchase unsuitable securities, without explaining the risks. They hyped these financial products because of the big fees, pulling in a large group of investors. Unfortunately, these investors are left holding the bag, while the investment advisors, promoters, broker dealers and sponsors get to keep their eye popping fees. Somehow it doesn’t seem right.

Continue reading “IMH Sells Risky Commercial Real Estate Investments to Unsophisticated Investors” »