May 6th, 2020
Los Angeles and San Francisco Daily Journal
Scott Gizer was recently quoted in Carter Stoddard’s Los Angeles and San Francisco Daily Journal article “Bankruptcy attorneys concerned about whether loan deferments will help landlord clients.” The article discusses landlords and the decisions they must make regarding mortgage payments. Scott commented about the effects of COVID-19 on the real estate industry.
“There’s no control over what the banks can and can’t do. California can’t tell the banks what actions to take. However, they have attained cooperation from the banks thus far, a 90-day relief from mortgage payments if you can show you were impacted by Covid,” said Scott Gizer of Early Sullivan Wright Gizer & McRae LLP.
Gizer and many of his colleagues were concerned over how deferred payments would be handled after the 90-day grace period.
“Will we see a balloon payment at the end of the period?” Gizer wondered. “Other lenders are allowing the three [delayed] payments to be tacked onto the end of the loan. That seems like a good solution.
“If banks do not extend some comparable long-term relief, another real estate and mortgage crash is a near certainty, Gizer said. “The blowback will be enough that they will need to take some action to defer that payment over a period of time. If they don’t there are going to be a slew of defaults and an overflow of REO [real estate owned] properties.”