February 2014

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In many non-judicial foreclosure jurisdictions, a foreclosure is generally considered concluded when the foreclosure trustee conveys the property to the purchaser. Though this is true from the purchaser’s perspective, the trustee and the creditor’s attorneys still have work to do. Within six months of the sale, the trustee is required to file an accounting of the sale with the Commissioner of Accounts for the jurisdiction in which the sale took place. Understanding the accounting process is essential for creditors, their counsel, and foreclosure trustees, to keep the foreclosure process moving. (more…)

In the world of large loan modifications, servicers and borrowers have turned frequently in recent years to the A/B Note structure in situations where the collateral financed by a loan is valued at less than the outstanding balance of the loan. When set up thoughtfully, in most instances both servicer and borrower can benefit from the A/B Note structure. However, there is an underlying risk of inadvertently creating a windfall situation for borrowers under the A/B Note structure when making decisions based upon traditional risk metrics. It is important for servicers to get a handle on the mechanics, benefits, pitfalls, and strategies associated with the structure before considering implementation. (more…)