Commercial Mitigation Group founder discusses ramifications of America’s downgrade from AAA to AA+

Hayon warns that making it more difficult for people to obtain commercial real estate is bad for business, bad for economy; second recession a possibility

LAS VEGAS – While most know that S+P downgraded the United States from AAA to AA+ late Aug. 5. But what most don’t know is what that really means.

According to Avi Hayon, senior financial analyst for the Commercial Mitigation Group, it means commercial real estate loans will be harder to come by and will be offered at a higher interest rate, making it harder for businesses trying to expand and harder for those who are unemployed or underemployed.

“If people aren’t able to obtain a commercial real estate loan in an effort to expand their current business, or start a new business, it’s going to be even harder for America to lower its unemployment rate,” Hayon said. “Additionally, companies won’t hire in a climate where fear is the dominant emotion.”

Hayon also says the country should expect to see more companies not being able to keep up with their existing commercial real estate loans.

“Unfortunately, business closures go hand-in-hand with a non-performing real estate market,” Hayon said. “We’re going to see things get worse before they get better. On the plus side, we should also begin to see more favorable resolutions as we mitigate our clients’ commercial loans. At this point, the banks can’t afford not to work with borrowers. Banks have to play ball or they’ll be in trouble themselves.”

Hayon also warns that, with money tight and the decreasing value of a dollar, a second recession is possible.

“With so much uncertainty out there, people aren’t as willing to take risks and invest,” Hayon said. “Unfortunately, what’s good for the country isn’t always the same as what’s good for individuals. For our country to recover, we’ll have to get to a point where people are spending again.”

For the country to restore its AAA rating, Hayon says it’s going to have to stop bailing companies out.

“We bailed companies out and demonstrated an inability to control the debt and reach a consensus in Washington,” Hayon said. “S+P had no choice but to reduce our credit. In essence, they were sending a message to the powers at be that they need to start behaving like adults.”

CMG was established in 2007 and has a 98 percent success rate. Prior to beginning work with a client, CMG performs a free no-commitment analysis of potential clients before taking them on. If they don’t think they can help someone, CMG doesn’t bring them on as a client. Commercial Mitigation Group’s fee is a flat 1 percent of the outstanding debt the company is mitigating for the client. The fee is paid in increments as each step of the process is completed. 

For more information on Commercial Mitigation Group, call 213-309-5415 or visit www.commercialmitigationgroup.com.

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