A commercial mortgage renegotiation deal may be the way to go when apartment vacancies are on the rise as a result of an economic downturn and unemployment is increasing. Owners of income-generating properties may find that an apartment loan modification could prevent foreclosure. The problem is that many of these properties have been financed by commercial mortgage backed securities (CMBS). Providers of CMBS loans had been too optimistic during the boom years and they had covered as much as 90 percent of the price of a property. However, these deals had large balloon payments at the end of the term.With vacancies rising fast, the income sources of owners are drying up and negative cash flow means that they are no longer capable of coming up with the mortgage payments. Rather than lose the apartments to foreclosure, the owners may try to get a commercial loan modification. If this is approved by the bank or lender, it may provide some breathing space for the borrower. It could mean that the monthly payments will be deferred for a certain period of time and that the maturity of the financial obligation could be pushed back by a few years. On the other hand, it may mean that the interest rate would be decreased so that the monthly payments would be reduced permanently.Banks and lenders are usually reluctant in allowing a commercial mortgage renegotiation because it would result in lower monthly income for them. In addition, CMBS loan mods are difficult to get approved because the interests of the investors in the securities have to be protected. Nevertheless, unusual times often call for unusual measures because a foreclosure is also bad for the lender. Hence, a prudent loan workout could be a way for the business to hold on to the property that could generate substantial income once again when the crisis is finally over.