Here is an example of a real life deal.
The property was a retail shopping center with good positive cash flow. The ownership had purchased the property about 3 years earlier with a balloon loan and was unable to refinance it. They had put in considerable equity and the initial loan to value was 50%. The current loan had matured and the lender wanted it paid off, first they raised the interest rate, then they put the loan in default. The outcome was they gave the ownership a 24 month balloon with a 20 year amortization. No fees or costs and dropped the rate by 300 bp to 5.5%, It worked out to a $74,000.00 annual savings to the owners…… Not a bad day