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
Category Archives: Insurance & Environmental Risks
Subscribe to Insurance & Environmental Risks RSS FeedWhen is Insurance Really NOT Insurance? When the “agent” really is NOT an agent
Posted in Good Times for Lenders, Insurance & Environmental Risks, TrainingThis 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 LendersLatent (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, TrainingEffective 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 IssuesIf 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 IssuesWe’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 IssuesEnough 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 IssuesIn 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 IssuesThe 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 RisksAs 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 LendersLast 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 RisksAs 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 IssuesThis 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 IssuesNo 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 RisksMore 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 RisksInsurance 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 RisksHere’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 RisksHere’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 RisksEnvironmental 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 RisksInsurance 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 RisksAs 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
Insurance Pitfalls in ADR Clauses
Posted in Good Times for Lenders, Insurance & Environmental RisksMany real estate and construction contracts now include detailed alternative dispute resolution ["ADR"] clauses stipulating that the parties will attempt to resolve their differences short of litigation by submission of the dispute to mediation, arbitration or both. The impetus for such clauses is the parties’ perception that these ADR procedures will lower litigation costs and… Continue Reading