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Real Estate

Foreclosures, Loan Modifications and Lender's Remedies

The Clark Hill “Loan Attention Team” is a working group of transactional, litigation and creditors’ rights lawyers and legal assistants assembled to provide the broadest perspectives of support to a lender administering a loan that has matured or is non-performing.

Our approach to modification, workout, foreclosure, and enforcement practice is to first understand what the client wants to achieve, then provide a document review, followed by a clear assessment of alternatives available, and then determine strategy and positioning with the client. We have no formulaic solution to all problems, although the goal to us always is to advance the client’s position in terms of control of its destiny and efficiency for the future. We work with the client to enable it to act quickly to restructure terms or secure collateral, without litigation where practicable.

We work to craft the best business solutions, as well as to be prepared to pursue whatever action is necessary. We fashion terms designed to keep the loan performing going forward while providing the lender with additional means of quickly capturing collateral in the event of a renewed default (e.g., waivers of redemption, deed in lieu provisions, receivership provisions, guaranties, additional collateral, etc., which could not be obtained upon loan creation, but can, in most cases, be obtained when restructuring).  If the lender has made a business decision to restructure the loan, we are experienced in documenting loan modifications and loan extensions, creating A-B notes, instituting lockbox accounts, disposition plans, and other agreements appropriate to the loan transaction. We are familiar with servicing obligations and inter-creditor considerations that must be taken into account, and we work constructively with loan officers and in-house counsel to achieve the client’s goals.

When a loan or borrower appears beyond rescue, our experience has shown that a realistic litigation assessment is critical. Prolonged litigation can extend non-performance, and we seek to motivate a cooperative turnover of collateral and/or creatively expedite the enforcement process. Deed in lieu transactions often become more likely when the borrower perceives aggressive enforcement. We have a reliable foreclosure procedure, using trained associates and legal assistants to prepare nonjudicial foreclosures and to pursue collection and cash control remedies, supervised by experienced partners. We locate and pursue alternative borrower assets, as well as actively pursue guarantor claims and all avenues to collection. We regularly prosecute judicial foreclosures and have achieved the appointment of receivers in both judicial and non-judicial foreclosures.

We are also prepared to assist a lender in disposing of owned assets. For one client, we created an online auction bidding process that resulted in a highly successful realization of value. The auction site included access to title work, survey, and other due diligence items necessary to satisfy conditions of purchase.

Our skills include bankruptcy. We have successfully obtained dismissal of filings for bad faith. We have obtained lift of stay orders, and have successfully captured rental income streams for lenders through rent assignment implementation, and litigated the rights to rents post petition and post foreclosure. Although not all bankruptcy cases can be managed so forcefully, our experience positions us to take the courses most likely to succeed.