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Category Archives: Tough Times for Lenders

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Sell the Company as the “Exit” Strategy? Tips on the Forbearance Agreement

Posted in Tough Times for Lenders

The “forbearance” agreement between a lender and a borrower is an important piece of an orderly sale of a company (as it sells all of its assets and pays creditors).  Whether you’re the creditor or the company, a thoughtful forbearance agreement (balanced with key interests of both sides) must be in place to begin the… Continue Reading

List & Links to “HOTTEST” Topics on L360 Point To: new lending, bad loans & iPad tips

Posted in Articles, Good Times for Lenders, Technology (including Green Buildings), Tough Times for Lenders

My latest resolution is to be better at giving lists of the “hottest” or top topics on L360 – as selected by you. It gives me a rough sense of the direction we’re heading. The summer 2012 list now has several topics on “positive” lending issues, which reflects the general up-tick that I’m seeing in… Continue Reading

Early Pay-off of a Commercial Mortgage Loan? Shhhh – here’s “why” it makes sense

Posted in Tough Times for Lenders, Workout Issues

Acceptance by commercial real estate lenders of a partial payment in full satisfaction of the loan (as a “discounted payoff” – a “DPO”), prior to the maturity of the loan, is a topic that receives little “public” attention. Here are a few reasons why we hear so little about this topic, and the challenges in… Continue Reading

Why Do Lenders Disdain Bankruptcy Court? 2 Cases Show “Why” and Offer Lessons

Posted in Good Times for Lenders, Market Trends, Remedies, Tough Times for Lenders

Two recent cases are good examples of “why” secured lenders, who hold liens on real property, correctly view bankruptcy court as a very, very, very bad place.  One case has received a lot of attention, including an appeal of the decision and state legislation; and the second bankruptcy ruling was overturned on appeal. The lessons… Continue Reading

Lender or Servicer Looking to Follow Litigation Trends & Cases? Follow the “Financial Appellate Voice”

Posted in Good Times for Lenders, Tough Times for Lenders, Training

David Johnson and Joe Regan are sharing their knowledge and experience in the Financial Appellate Voice, a new blog focusing on litigation involving the financial services industry in Texas. They start strong with a webcast and posts on these topics (these are just a few that jumped out at me): a webcast with an update… Continue Reading

Dead Debtor (tortoise) v. Living Lender (hare): Which One Correctly Values On-line Information?

Posted in Good Times for Lenders, Technology (including Green Buildings), Tough Times for Lenders

The dead are beating their lenders in recognizing the value of, and then protecting, their on-line lives – I mean assets. Does the tortoise beat the hare (again)? Even when the tortoise is dead? This perspective rings out in this: The Dead: on-line assets (accounts, sites and materials) are recognized as an important asset by… Continue Reading

Fed Policy on Renting Residential REO Points to . . . no near term recovery

Posted in Good Times for Lenders, Tough Times for Lenders

A recent policy statement issued by the Federal Reserve “reminds” banks and their examiners that renting residential property, after the bank obtains title, can be part of the bank’s process of returning the property to the market place.  The statement acknowledges that although banks “should make good-faith efforts to dispose of OREO properties at the earliest… Continue Reading

Collateral or REO include Residential Condo Units? New Fannie Mae rules impose burdens on loan servicers

Posted in Tough Times for Lenders

Bob Burton at Common Interests 360 reports on some good news for develpers and resident controlled owners  associations if Fannie Mae is holding a loan on a residential condo unit - but it is BAD news for loan servicers.  Briefly, the rules impose a litinany of new “must do” items onto the servicer, with a focus on paying… Continue Reading

Lenders & Leases: Spotting a “Troubled” Tenant – the need for “forensic” leasing

Posted in Good Times for Lenders, Tough Times for Lenders, Training

Whether you’re a loan originator, or a loan servicer, reviewing a commercial lease (or amendments) becomes more challenging in tough real estate markets simply because there are more tenants in distress – and you need to identify them. So, are there lease provisions that could indicate a distressed tenant? Below  is a short list of… Continue Reading

MBA Report Shows Good Trends in Bad Numbers; BUT Judicial Foreclosure is a DRAG (I have questions)

Posted in Articles, Good Times for Lenders, Market Trends, Remedies, Tough Times for Lenders

Recently, the Mortgage Bankers Association published its “National Delinquency Survey” for the fourth quarter of 2011.   The report covers the delinquency and foreclosures  rates on first-lien mortgage loans, and includes @ 88% of all single family homes in the US.  Although the survey does NOT cover commercial mortgages, the data gives us important incite on trends AND information on the… Continue Reading

Hope for Condominium Mortgages or REO in Your Portfolio? Changes to FHA Restrictions Coming?

Posted in Good Times for Lenders, Tough Times for Lenders

Bob Burton over at Common Interest 360 gives some “hope” for lenders and servicers dealing with loans secured by residential condo units – the FHA is being pushed to implement changes to the guidelines used by it in financing condo units owned by residents.   Commercial real estate depends upon (and dies with) credit; and current FHA guidelines make… Continue Reading

Minority Owner Exiting an Under Performing Deal? Don’t Need Lender Approval? Right . . . Wrong (or “oops”)

Posted in Guaranty Issues, Tough Times for Lenders, Training

People don’t “connect” their ownership (even a minority ownership) with their liability under bad-boy or non-recourse carveout agreements (whether in the form of an indemnity, or as a guaranty).   So, minority owners often transfer ownership without getting a release from bad boy liability .  It could be a costly mistake. With deals under water… 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

Buying Commercial Mortgage Loans isn’t Rocket Science? Right. Unless You Overlook the . . .

Posted in FAQs, Tough Times for Lenders, Training

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

Why the Co-lender Train Wreck? Lenders Used Wrong Agreement

Posted in Good Times for Lenders, Tough Times for Lenders, Training, Workout Issues

Train wrecks draw a crowd.  Look at this old film from the 1913 California State Fair (click the text).       1913 Train Wreck                             Unfortunately, many co-lender structures (secured by distressed commercial real estate) look exactly like this train wreck…. Continue Reading

Need to “Reposition” the Distressed Project or REO? Consider a Condominium

Posted in Tough Times for Lenders, Workout Issues

So much of dealing with distressed commercial real estate is an “out of the box” experience. But my use of the phrase “out of the box” is extremely nuanced: change your thinking; and change the box (the property), too. Here’s an approach that goes out of box and then reverses field to “remake” the box… Continue Reading

MERS Update: NY Attorney General Sues Major Banks Claiming Improper Foreclosures Due to Use of MERS

Posted in Technology (including Green Buildings), Tough Times for Lenders

Based upon a series of wins by MERS in various courts, it looked like MERS would survive, and we’d avoid the need for a federal solution in suppport of  the continued use of the MERS electronic registry, which is a fundamental component of  securitized home loans (and some commercial loans). That was yesterday. Today, the New… Continue Reading

Bad-Boy Liability: Courts Find Liability for Violating Solvency or Net Profit Retention Covenants

Posted in Guaranty Issues, Tough Times for Lenders

We’re in that part of the cycle where many of us are focusing on guaranty agreements, which run the full spectrum from full payment and performance guaranties to “bad boy” indemnification agreements (my recent comment). One issue being litigated is the bad boy or recourse event tied to a breach of these types of covenants… Continue Reading

Defaulted Hotel (California) Loans: Nice Story in Bloomberg; Here are some practical tips

Posted in Market Trends, Remedies, Tough Times for Lenders, Workout Issues

Nadja Brandt and Kara Wetzel with Bloomberg have a nice piece on the scope of and challenges in dealing with defaulted hotel loans in CMBS pools.  It is a good read.  And it has been picked up or syndicated in other news media. As I’ve noted before, with a hotel or motel securing the loan,… Continue Reading

Collection Plate: Litigation Against Guarantors or Indemnitors Points to Lessons Learned – Tips on Underwriting & Loan Document Terms

Posted in Guaranty Issues, Remedies, Tough Times for Lenders

(More on the Collection Plate collection, which focuses on the recovery side of our work – the bottom line, nitty-gritty, work of getting "back" the money.) Our economic eddy is at the stage where law suits against guarantors or indemnitors, on full payment and performance agreements or on "bad-boy" agreements, are reaching final judgment –… Continue Reading

Thanksgiving Reflections: ACC Meeting brings 21 Good “Ideas” – but 1 is GREAT!

Posted in Good Times for Lenders, Technology (including Green Buildings), Tough Times for Lenders, Training

Thanksgiving week is a good time to take a breath, relax and reflect – which is what I offer up here: It also brings to end the industry meeting circuit for 2011. Fred Krebs has a nice posting on the Association of Corporate Counsel blog. As his takeaway from the ’11 annual meeting of ACC, his… Continue Reading