Buying a commercial mortgage loan is NOT rocket science. There are, however, some very basic aspects of a mortgage loan that should be included or addressed in the purchase of the loan. I list a few of them below. But before we get to them, ask yourself the question that scientists ask all the time: “what… Continue Reading
Category Archives: FAQs
Subscribe to FAQs RSS FeedForeclosure Myths: Urban Myths on how to STOP a Foreclosure or Void the Loan (really??)
Posted in FAQs, Remedies, Tough Times for LendersThe topics of "stopping the foreclosure" or "voiding the loan" have a life of their own, and many in reality simply are urban myths. They are good examples of "when" and "why" a lawyer should be consulted. I hear these topics all the time – in the context of both consumer debt and commercial debt: "If you… Continue Reading
More Tips on Giving Your Deposition (part two)
Posted in FAQs, Tough Times for Lenders, TrainingHere’s part two (link to part one) on what can be an very, very uncomfortable experience (remember, parts of litigation seem personal) . Before the deposition, show this list to your lawyer as (perhaps) a helpful tool. Your lawyer will have specific advice for you and your case. You don’t want to prep for… Continue Reading
Chapter 11 Bankruptcy: Quick Tips For A Lender
Posted in FAQs, Tough Times for Lenders, TrainingThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). The phrase "Chapter 11 bankruptcy proceeding" is NOT a lender friendly phrase. Chapter 11 is a bankruptcy where the borrower\debtor intends to reorganize itself, right-size its balance sheet and then emerge from bankruptcy as a… Continue Reading
Bankruptcy & the “Automatic Stay”: How Do You “Lift” or Get Rid Of It?
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). When a borrower files for bankruptcy, all creditors are automatically prohibited from exercising any remedies against the borrower or its property. This is called the "automatic stay." Consequently, one initial focus of a creditor… Continue Reading
Bankruptcy of a Commercial Tenant: Time is NOT on Your Side
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). The last several blogs in this FAQ series have focused on bankruptcy issues. While bankruptcy has many unique rules, and as a "court of equity" a bankruptcy court is positioned to deal "creatively" with… Continue Reading
Fraudulent Transfer: What Does It Mean and Why Do I Care?
Posted in FAQs, Tough Times for Lendersfraudulent transfer
CMBS Loans: IRS Corrects Mistake & Recognizes Partial Release Provisions
Posted in FAQs, Tax Issues, Tough Times for Lenders, Workout IssuesRecently the IRS corrected a mistake inadvertently created by it in September 2009, when it made changes to the REMIC rules governing changes to CMBS loans. One result of the 2009 change was that partial releases, expressly contemplated in the CMBS loan document, must pass the “principally secured by real estate” test for qualified mortgages at… Continue Reading
Bankruptcy and the Automatic Stay: What Does It Mean and How Does A Lender Get Around It?
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). Although I can NOT quantify this statement, we’re seeing more and more commercial real estate go into bankruptcy. Of course, these typically do NOT involve CMBS loans; probably because those loans typically have a… Continue Reading
Understanding Workouts & Bankruptcy: A Glossary of Terms
Posted in FAQs, Tough Times for Lenders, TrainingDealing with distressed debt takes a special skill set (see our FAQ series) and demeanor – and almost a new vocabulary. To give you a jump start in it, or maybe simply a helpful resource, here is a short list or glossary of common workout, remedies, bankruptcy and securtization terms. If you know of a term that… Continue Reading
Foreclosures: What Happens To Commercial Leases & Personal Property?
Posted in FAQs, Remedies, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). Two of my favorite little "sayings" about distressed commercial real estate are these: It’s all about the lease (think money) Is there any collateral that is NOT real property? Does the collateral include any personal… Continue Reading
Foreclosures: Dealing With State Property Tax Liens
Posted in FAQs, Remedies, Tax Issues, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). Borrower’s failure to pay property tax liens often is a good indicator that the loan, and the collateral, are in trouble; and that soon, Borrower will fail to pay the scheduled installments on the loan…. Continue Reading
Deed in Lieu of Foreclosure: Factors To Consider and Major Provisions In The DIL Agreement
Posted in FAQs, Tough Times for Lenders, Workout IssuesThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). I’m working on several deed in lieu of foreclosure agreements right now. So, I’m putting to use the thoughts and suggestions offered up to you here (and in prior postings) on this topic. Here are… Continue Reading
Deed in Lieu of Foreclosure: Should Lender Require a Legal Opinion? What Due Diligence Items Should Be Obtained?
Posted in FAQs, Technology (including Green Buildings), Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). The following questions cover deeds in lieu of foreclosure, which is a situation where borrower literally gives ownership of the commercial real estate to Lender by transferring title to Lender. FAQ #34 – In… Continue Reading
Deed in Lieu of Foreclosure: When To Do A DIL? Any Title Insurance Issues In A DIL?
Posted in FAQs, Remedies, Single Purpose EntityThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). We’ve addressed deeds in lieu of foreclosure in the past (link). Here is some more information on it. FAQ #32 – When should a lender (or servicer) seek/accept a deed in lieu agreement? State’s foreclosure… Continue Reading
Foreclosures: Dealing With Junior Mechanics’ Liens & Federal Tax Liens
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). Mechanics’ liens and Federal Tax Liens are two common challenges with distressed commercial mortgage loans. Blindly charging through the foreclosure process is a mistake – even if you believe that your lien is first in… Continue Reading
More FAQ: Do I Really Need A Title Report; & Dealing With Mechanic’s Liens
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). The need for title reports and "how" to deal with mechanic’s liens are two very, very common questions. FAQ #28 – Do I need a current title report? A current title report provides useful information… Continue Reading
More FAQ: Next Steps After Foreclosure And The Need For An Appraisal
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). FAQ # 26 – What are some of the most immediate steps after the foreclosure sale? Post-sale procedures vary from state to state Notice should be given to the IRS that the sale has occurred… Continue Reading
Tips on Two Important Borrower Topics: Lender’s Ability to Sue Guarantor During Foreclosure and Contesting A Foreclosure
Posted in FAQs, Remedies, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). The following questions focus on two issues of great importance to the commercial borrower: (i) Lender’s ability to sue the guarantor during the foreclosure process; and (ii) borrower’s ability to contest the foreclosure sale. (Note:… Continue Reading
Answers To Basic Foreclosure Questions and A Brief Chart Summarizing Foreclosure Process In All 50 States
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). In any workout of distressed commercial real estate, ultimately the focus narrows in on the process and timing of foreclosure. The answer varies state to state. Here are two questions, answers and a very… Continue Reading
Diversion of Rent and Lender Liability: Bad Acts Pointing To Borrower and Lender Liability
Posted in FAQs, Guaranty Issues, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). Strangely enough, I associate diversion of rent with lender liability - because both are common liability claims based upon "bad acts" of either a borrower or a lender. FAQ #20 – What if I think… Continue Reading
FAQ – Tips on Short Sales, Partial Payments and Partial Releases During a Commercial Mortgage Loan Default
Posted in FAQsThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). FAQ #18 – Can I participate in negotiating a third party short sale prior to the deed-in-lieu or foreclosure, or as I exercise other remedies (where the sales proceeds are less than the loan balance… Continue Reading
Listing of Key Aspects of REO Sales Contracts – the Seller’s Perspective
Posted in FAQs, Market Trends, Tough Times for Lenders, TrainingWith more banks and CMBS loan servicers taking title to CRE (via foreclosure and deed in lieu of foreclosure), the amount of REO (or real estate owned) has grown – and will continue to grow and grow as CRE defaults escalate. Most REO sellers have regulatory or contractual limitations on the time periods that they can continue… Continue Reading
FAQ – Advantages and Disadvantages of a Real Property Deed In Lieu of Foreclosure
Posted in FAQs, Tough Times for LendersThis is a series of blog entries in which we provide some quick answers to lenders’ frequently asked questions (FAQ). While I’ve covered this subject before [link], here’s another overview of the advantages and disadvantages of taking title (to real property collateral) back from a borrower "in lieu of" doing a foreclosure. FAQ# 16 –… Continue Reading