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Category Archives: Insurance & Environmental Risks

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Grading the Examiners: OCC’s Commercial Real Estate Lending Handbook gets a “C”

Posted in Good Times for Lenders, Guaranty Issues, Insurance & Environmental Risks, Remedies, Training, Workout Issues

Last month, the Office of the Comptroller of the Currency published the Commercial Real Estate Lending handbook (August 2013).  The 128 page handbook gives guidance to bank examiners and bankers on risks inherent in commercial real estate (“CRE”) lending.  It replaces a 95 page version published in 1995 (and revised in 1998). For this new school year… Continue Reading

Real Estate Title Review: Don’t Miss These Stealth Restrictions

Posted in Good Times for Lenders, Insurance & Environmental Risks, Training

In many cities, urban growth now fills the farmland that once surrounded Navy and Air Force airfields.  Real estate development and finance near Navy and Air Force runways, however, requires special attention to a special set of restrictions called “AICUZ.”  These Department of Defense regulations severely restrict land located near military runways.  It is easy… Continue Reading

Insurance Nightmare: As Lawyers Attack Forced Placed Insurance, Lenders Accept “Hope Insurance”

Posted in Good Times for Lenders, Insurance & Environmental Risks, Tough Times for Lenders

A recent and well-publicized lawsuit against a lender shows our appetite for headlines even extends to insurance issues.  Yes, insurance. My comment here is NOT about the merits of the lawsuit.  (I’m not evening giving you a link to it.) Instead, I marvel at the headline, and our ability to not focus on another very large and very important… Continue Reading

When is Insurance Really NOT Insurance? When the “agent” really is NOT an agent

Posted in Good Times for Lenders, Insurance & Environmental Risks, Training

This seems to be insurance week for me. Later this week, I’ll jump into a recent court case that recently hit the headlines. Today, however, I received an e-mail warning of the POSSIBLE unauthorized issuance of property insurance polices by “an unathorized third party purporting to represent the insurers listed below and not to policies properly issued by the… Continue Reading

Free Webinar on Environmental Risks & Mitigation Measure: Oct 11 (noon CST)

Posted in Good Times for Lenders, Insurance & Environmental Risks, Tough Times for Lenders

Latent (and even flaming) environmental risks play an important role in the monitoring of problem commercial real estate loans, in the decision to foreclosure and in the sale of foreclosed properties. For many servicers and lenders, these risks are not fully understood – perhaps simply because in the "good economy" (prior to 2008), lenders relied… Continue Reading

Important for REO Sales & DIL: New ALTA Survey Standards Effective Feb 23, 2011 (revised blog entry)

Posted in Insurance & Environmental Risks, Market Trends, Tough Times for Lenders, Training

Effective February 23, 2011 (next month), the new 2011 ALTA Survey Standards become effective (download a copy).  (Link to ALTA website and current 2005 requirements.) What could this mean for you?  How is this relevant for distressed commercial real estate? REO purchasers could require a survey prepared according to these standards (in part, because purchaser’s lender… Continue Reading

Green Building As Collateral: More Tips & Suggestions on avoiding a blood-bath after foreclosure (or a note purchase)

Posted in Insurance & Environmental Risks, Technology (including Green Buildings), Tough Times for Lenders, Workout Issues

  If you collateral is a green building, then a litany of unique issues and approaches come into play. Recently I discussed this topic with Bill Weinberg – my green building expert. Here are a few "high level" issues offered up by Bill to get our attention (prior blog) – What is nature of the collateral?… Continue Reading

Green Building As Collateral: First Lessons From First Few Tips On Dealing With Green Buildings

Posted in Insurance & Environmental Risks, Technology (including Green Buildings), Tough Times for Lenders, Workout Issues

We’re investigating green buildings, from the perspective that some portion of the huge amount of distressed commercial real estate will include some green buildings. Earlier this week, Bill Weinberg focused us on these preliminary topics: is the collateral raw land or does it include improvements (buildings or other structures)? operational and maintenance issues, including the… Continue Reading

Green Building As Collateral: Tips on avoiding a blood-bath after foreclosure (or a note purchase)

Posted in 1 Guest Writers, Insurance & Environmental Risks, Technology (including Green Buildings), Tough Times for Lenders, Workout Issues

Enough of MERS and technology – but, how about technology but from a different angle? The amount of commercial real estate debt in distress is huge: delinquent unpaid balances on CMBS loans exceeding $62 billion (October 2010), and heading toward $70-$80 billion by year end ’10 (per Realpoint) delinquency ratio of 8.04% (September, 2010) (per… Continue Reading

Title Insurance Ticking Sound: Indentify Continuing Title Obligations of the Borrower – BEFORE you foreclose or accept a deed in lieu

Posted in Good Times for Lenders, Insurance & Environmental Risks, Tough Times for Lenders, Workout Issues

In earlier postings, we’ve covered: Verifying title insurance The need to review the terms & scope of the title insurance (2nd in a series; another posting) Some of the title insurance issues when doing a deed in lieu of foreclosure These are all good steps. But they overlook an equally important step: taking another look… Continue Reading

Need a Decision Tree and Short List of Key Topics for Your Next Workout? Try these. (Blogging after ACMA)

Posted in Guaranty Issues, Insurance & Environmental Risks, Lender Liability, Remedies, Tax Issues, Tough Times for Lenders, Training, Workout Issues

  The second day of seminars, at the annual meeting of the American College of Mortgage Attorneys, had two key take-aways for me.  The first nugget focuses on the Dodd-Frank financial law. The second nugget (below) is much more practical.  Inspired by comments made by Jim Allen during a panel presentation (he’s with the Miller Canfield… Continue Reading

ALTA 21 Creditors Rights Endorsement: List Grows of Companies NOT Issuing It

Posted in Good Times for Lenders, Insurance & Environmental Risks

As noted in my posting this morning [link], the ALTA Board of Governors voted to withdraw and de-certify the use of the ALT 21endorsement form.  It removes creditors rights issues from certain title insurance policies. So, what is the next step? The title companies seize the opportunity, and stop issuing it.  (You’re not surprised.) Here’s the list of… Continue Reading

Title Insurance Ticking Sound Blows UP: ALTA 21 Creditors’ Rights Coverage Ends

Posted in Good Times for Lenders, Insurance & Environmental Risks, Tough Times for Lenders

Last Tuesday (Feb 2), the ALTA Board of Governors met to review and discuss the creditor rights issue in light of various recent court rulings. The outcome is no surprise: they voted (unanimously) to withdraw and de-certify the ALTA 21 endorsement (commonly referred to as creditors’ rights coverage).  This change will be effective on March… Continue Reading

FDIC with Civil Demand Letters: preparing for them

Posted in Good Times for Lenders, Insurance & Environmental Risks, Market Trends

(WARNING: Do not "tune this one out" simply because you’re NOT at a bank.  Every lender or servicer should have this same concern . . . .) From one of my all-time favorite movies, and an all-time favorite scene: [about the trackers following them] Butch Cassidy:  "I couldn’t do that.  Could you do that?  Why can… Continue Reading

A Continuing Dilemma: The Insurance Industry Wrestles with Risk-Based Capital Requirements

Posted in Good Times for Lenders, Insurance & Environmental Risks

As many readers that follow the insurance industry know, the National Association of Insurance Commissioners ("NAIC") met this last summer and went through a series of sometimes heated discussions over what modifications should be made to NAIC Risk-Based Capital rules. Specifically, the current NAIC mortgage loan portfolio quality measure known as the "Mortgage Experience Adjustment… Continue Reading

Ticking Sound: Review Your Title Insurance – A Quick Checklist (Part 2 of 2)

Posted in Good Times for Lenders, Insurance & Environmental Risks, Workout Issues

This is the second part of a two-part series laying out a quick checklist covering title insurance issues—and highlighting topics that should be investigated.  This is an important and often overlooked topic. Was UCC insurance obtained (covering attachment, perfection and priority of lender’s security interest in personal property)?  Here are the types of transactions where… Continue Reading

Ticking Sound: Review Your Title Insurance – A Quick Checklist (Part 1 of 2)

Posted in Good Times for Lenders, Insurance & Environmental Risks, Workout Issues

No surprise at this statement:  When the real estate mortgage nears the ditch, the lien priority of the loan and the status of the title (such as easements, deed restrictions, access rights and lien priority) all come under scrutiny. One important point of inquiry is the title policy covering the loan.  An “audit” or review… Continue Reading

That Ticking Sound: Part One of our “Insurance For Lenders and Servicers” Resource Guide

Posted in Good Times for Lenders, Insurance & Environmental Risks

More from our That Ticking Sound  series (use the search term "ticking" in the keyword search box on the right hand side for other postings on insurance issues) . . . . Back in the "good old days" when foreclosed and REO property was promptly sold, it was all too easy for lenders and servicers to… Continue Reading

More on That Ticking Sound: Vacant Collateral or REO = New Insurance Problem – Suggestions On Continuing the Property Insurance Coverage

Posted in Good Times for Lenders, Insurance & Environmental Risks

Insurance issues often are overlooked in the context of a workout or a foreclosure. (Recall our other posting covering title insurance.) So, here’s another topic from our "ticking sound" series covering insurance issues… Chances are that foreclosed property is empty property.  No one is present to lock the doors, keep the heat on or make… Continue Reading

More on That Ticking Sound: Don’t Forget to Obtain or Verify Insurance Coverage

Posted in Good Times for Lenders, Insurance & Environmental Risks

Here’s another topic from our "ticking sound" series covering insurance issues and environmental issues: The subject of insurance for foreclosed properties doesn’t seem to come up very often, most likely because there are so many other more pressing problems to worry about. But failing to ensure that the property has adequate insurance – not just "trendy" coverage like environmental… Continue Reading

More on That Ticking Sound: Selling Environmental Problem Property

Posted in Good Times for Lenders, Insurance & Environmental Risks

Here’s another topic from our "ticking sound" series covering insurance issues and environmental issues . . . Most discussion of the environmental issues that can come with foreclosed property focuses on when the CERCLA lender safe harbor provisions and its state-law analogues apply. What doesn’t get discussed often enough is how a lender goes about selling an… Continue Reading

More on That Ticking Sound: Environmental Risks and Lender Safe Harbor under CERCLA

Posted in Good Times for Lenders, Insurance & Environmental Risks

Environmental issues loom large in the context of a real estate workout or a foreclosure.  This was a lesson "learned" in the ’80s. (A lesson that often even "glowed" in the dark.)  So, here’s another topic from our "ticking sound" series covering insurance issues…and now, environmental issues . . . Few acronyms have more power… Continue Reading

More on That Ticking Sound: ADR Clauses and Liability Insurance

Posted in Good Times for Lenders, Insurance & Environmental Risks

Insurance issues often are overlooked in the context of a workout or a foreclosure.  (Recall our other posting(s) covering title insurance.)  So, here’s another topic from our "ticking sound" series covering insurance issues . . . . Many real estate and construction contracts now include detailed alternative dispute resolution ["ADR"] clauses stipulating that the parties… Continue Reading

LandAmerica Financial Group in Bankruptcy: An Update on Insurance Coverage and Escrow Issues

Posted in Good Times for Lenders, Insurance & Environmental Risks

As noted in my earlier posting on Fidelity’s acquisition of Commonwealth Land Title and Lawyers Title, the American College of Mortgage Attorneys furnishes its members with information on title insurance and escrow issues relating to the bankrupcty of LandAmerica Financial Group. Here is a portion of the most recent announcement from ACMA: A. Title Insurance… Continue Reading