SunTrust Banks

My building, Lustra LLC had a 5 year commercial loan of $1, 500, 000 with Suntrust Bank which matured in December 2009 with balance of $1, 349, 616. I maintained my payments in the past even under extreme financial hardship where my building was vacant for over a year in 2008. Since February 2009, the building was 75% occupied and 100% occupied by December 2009. I have all documentation supporting my ability to maintain monthly payments, yet I'm facing foreclosure because I cannot meet my lender's loan extension requirements.
Initially the bank offered me only a 6-month extension so I proposed to decrease my loan balance by $200, 000; the money would come from a private loan. When I finally received a loan restructuring offer on 2/23/2010, It was far from fair and it was much too late to get financing anywhere else: the loan would be extended only to December 2010 (just for another 9 months) and other terms were even more difficult to accept:
1) A $200, 000 principal payment was required at closing.
2) An additional $200, 000 paydown was required on or before 8/31/2010.
3) A $100, 000 escrow was to be posted to mitigate any potential judgment.
4) A $200, 000 prinicpal paydown was expected by 1/30/2010.
5) Additional fees included a $10, 000 loan renewal fee, $1, 900 appraisal, bank attorney's fees, survey & building plans, most likely adding to well over $20, 000
After discussing these terms with Suntrust, the offer was slightly modified two days later: The loan was to be extended for another 6 months, to June, 2011 (just for 1 year & 3 months), but the option to extend it for additional 6 months was cancelled, the $200, 000 payment due Nov, 2010 was dropped and the loan renewal fee increased from $10, 000 to $15, 000.
My complaint against Suntrust Bank is based on Suntrust fraudulent & dishonest business practices, unfair treatment and acting against public interest (unless it is in public interest to have more foreclosures). Our modern society cannot function without banks, not banks acting like ruthless extortionists, but ones which provide services to the public and our economy. Unfortunately, Suntrust Bank does not fit in to this category. Instead, it accurately fits that of a loan shark. The restructured loan proposition, offered by Suntrust clearly reveals predatory mechanisms. Characteristics typical for loans designed to exploit the vulnerable borrower include:
- not taking into account the borrower's ability to meet the loan terms
- excessive and unfair loan & legal fees (this is not a new loan - it is just an extension)
- purposely structuring the loan with terms the borrower cannot afford (huge principal reduction requirement)
- establishing impossible, abusive terms & conditions that will trap borrower and lead to a foreclosure
(huge payments and a very short term) which is not intended to recover a non performing property
I am fully capable to continue my loan payments but a foreclosure is going to cripple this otherwise healthy, self sustaining property. Are more foreclosures a "Suntrust way" or "Suntrust vision" of how to improve our currently ailing economy, because there appears to be a discrepancy between their actions and their motto listed on their website: “The Company’s mission is to help people and institutions prosper by providing financial services that meet the needs, exceed the expectations, and enhance the lives of our clients, communities, colleagues, and ultimately our shareholders.” Suntrust’s unwillingness to discuss its abusive loan terms and clear push towards foreclosure raises suspicions that it is an attempt to obtain this property at a discount. Examples of this include a low appraisal of $1, 100, 000 by the appraiser hired by Suntrust for a property which is well maintained, has 100% occupancy, has a gross rental income of $351, 876 per year, and was thoroughly renovated in 2009 at the government tenant expense of over $500, 000. This property was scheduled to close only a few months earlier, on 10/2/09, at the price of $2, 000, 000, with only 75% occupancy, while real estate firms such as Marcus & Millichap want to list it on the market at &2, 400, 000.
Interestingly, the empty parking lot 117ft x 205ft with no building and $0 income which is located right next to my property is currently listed at $700, 000 and the property directly across the street from mine, being a much smaller building and currently vacant with $0 income is listed on the market at $800, 000.
If this is not an unethical attempt to obtain my property at extremely discounted price, than it is a mystery why Suntrust wants to foreclose on the property appraised at $1, 100, 000 when the loan balance is $1, 349, 000 and the borrower is fully capable to maintain his monthly payments. Logically there is no real need to foreclose. It is common knowledge that any foreclosure proceedings further decrease the value of foreclosed properties usually leaving banks with substantial loses.
I am not asking for any preferential treatment, or for any reduction of my financial obligations towards my lender. I'm asking for fairness and a feasible, mutually beneficial, loan restructuring offer. No loan should resemble extortion scam. I believe that any predatory behavior and unfair lending practices, displayed in this particular case by Suntrust should be exposed and discouraged by proper, government regulatory agencies. I believe it is worth investigating whether unethical, predatory behavior is an official policy of an unscrupulous lender, discretely enforced upon Suntrust employees or it is individual initiative exceeding official policies requirements.