- Some lenders used a co-lender agreement without considering the basic nature or perspective of the agreement – whether the form was “pro-buyer” or “pro-seller”
- Why is the colender group having so many problems in making decisions when the loan is under distress?
- Why the delay, from the co-lender side, in resolving a distressed loan when the borrower has a perfectly acceptable solution?
The delay might be more basic than lenders with different balance sheets and different regulatory environments. Some lenders treated the colender agreement as if it was a LSTA form (which are used in trading loans not secured by commercial real estate). Unfortunately, LSTA standardization does NOT exist in the world of commercial real estate finance. There is no recognized “one size fits all” form of co-lender agreement in commercial real estate finance. Yes, this one falls into the “lessons learned” category. But unless and until you bake this lesson into the core knowledge base and process of your organization, the train wreck will be repeated at the next commercial real estate downturn. If not, we’ll all stand around and watch the train wreck. If you have a comment or a story to share with us, please post it below.