July 2013

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Last summer, the Georgia Court of Appeals ruled that a foreclosure advertisement must identify the secured creditor on whose behalf a foreclosure sale is being performed. See Reese v. Provident Funding Assocs., LLP, 317 Ga. App. 353, 730 S.E.2d 552 (2012). In that case, a loan servicer advertised a foreclosure sale on behalf of the holder of the security deed, but did not include the correct identification of the holder in the foreclosure advertisement. (more…)

Lenders have a number of options when faced with a borrower in default. In Tennessee, one option to seriously consider is seeking appointment of a receiver. A receiver will step into the role of the borrower or management company and will operate the property until the lender makes a decision about foreclosure or sale. Appointment of a well-qualified receiver can result in stabilized operations at either a residential or retail property and make the property more attractive to potential purchasers. (more…)

A new type of threat is emerging that may thwart special servicer collections: retroactive state legislation. For most CMBS collection actions involving nonrecourse loans, the issue of springing recourse triggers (so-called “bad boy guaranties”) rarely comes into play, but merely remains as part of the background against which the parties negotiate and maneuver. In the past, when the issue did come to the forefront, the special servicer merely had to analyze the contract language to determine whether a recourse trigger applied under the terms of the agreement. Unfortunately, this is no longer true in every state. Rather, two states, Michigan and Ohio, have recently passed statutes purporting to limit the enforceability of certain recourse triggers. (more…)