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Question
In regards to commercial mortgage loans, which of the below statements is FALSE?A) Commercial mortgage loans are typically balloon loans requiring substantial principal payment before the end of the balloon term.
B) If the borrower fails to make the balloon payment, the borrower is in default.
C) The lender may extend the loan and in so doing will typically modify the original loan terms.
D) Balloon risk is the risk that a borrower will not be able to make the balloon payment because the borrower either cannot arrange for refinancing at the balloon payment date or cannot sell the property to generate sufficient funds to pay off the balloon balance.
Answer
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