In addition to the events that create “full recourse” liability (for the entire loan), bad boy liability also includes losses or damages incurred by the Lender based upon another list of “bad” events or triggers.  I’m sure that Jim Wallenstein will cover this at his presentation during the University of Texas Mortgage Lending Institute.

Several months ago, I mused that, due to the conservative trending of commercial real estate lending, the list of “bad boy” exceptions (to a “no personal liability” deal) could be viewed as a full recourse deal.  In other words, the exceptions to “no liability” could be so expansive or long, the practical reality equates to

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

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

(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 –

Tommy Bastian has a great presentation on the "myths and reality" of foreclosing in Texas.

He addresses several very important and unique attributes surrounding the foreclosure of securitized real estate loans.  It is a very popular topic of readers of TT4L. Indeed, Courtney Bristow’s article is a top 5 download on the topic (published here