Category Archives: Foreclosure

Subscribe to Foreclosure RSS Feed

Oh TRO You Don’t . . .

In the latest installment of “Mezzanine Foreclosures in the Time of Coronavirus”, the Lender fired back at the Borrower’s injunction request, claiming that the Borrower had “squandered lifelines” thrown out to it over many months and that granting the stay would let the Borrower “benefit from a global crisis by evading the consequences of its … Continue Reading

A Mayday on May Day . . .

Last week the New York Supreme Court answered an SOS from a borrower seeking a TRO to prevent a sale under the UCC in NYC that was scheduled to take place on May 1st.  For more information on this alphabet soup, read our OnPoint about new potential pitfalls for mezzanine lenders seeking to foreclose during … Continue Reading

“Nobody Fell Off the Turnip Truck Yesterday”: What’s at Stake for Commercial Real Estate Lenders in Sutton 58?

Note: This was republished on June 6, 2019 to reflect factual updates. Sutton 58 Associates LLC v. Pilevsky et al., is a New York case which gets to the heart of the enforceability of classic single-purpose entity restrictions in commercial real estate lending.  At issue is how far a third-party may go to cause a … Continue Reading

A Survival Guide for Winning Default Rate Interest in Courtroom Battles

Last year, a California Bankruptcy Court wiped out $10.2 million in default interest (“DRI”) when it ruled that a 5% DRI was an unenforceable penalty in a Chapter 11 bankruptcy case where the construction lender fully recovered principal, interest, and other costs of collection. In acting as the borrower’s fairy godmother, the Court noted that … Continue Reading

Secured Creditors Beware: Overvalued Properties in Bankruptcy

An overvalued property may now have a bigger impact on a secured creditor’s bottom-line during bankruptcy.  Splitting with the Seventh Circuit, the Fifth Circuit in Southwest Securities, FSB v. Segner (In the Matter of Domistyle, Inc.), 2015 WL 9487732, held that a bankruptcy trustee may surcharge its expenses for maintaining a property even before moving … Continue Reading

MERS: Better Than a Faster Horse

MERSCORP, Inc. (“MERS”) has been under fire for years. We wrote about it a while back when residential mortgage borrowers challenged the ability of MERS to foreclose on mortgages it held on the theory that MERS, as a mere nominee to the lender, was not a real party in interest.  More recently, local recording offices … Continue Reading

Foreclosure Attempt Blocked? What You Should Know Before the Clock Hits Zero

Just when you thought we were out of the housing crisis weeds of ’07—think again.  Apparently when an abundance of people buy homes they can’t afford and predictably fall behind on their payments, the judicial foreclosure process becomes log-jammed.  Enter our latest housing crisis nemesis: the statute of limitations. Lenders must generally file a foreclosure … Continue Reading

What’s in a Name?: A Private Sale by a Receiver May Amount to a Foreclosure Sale under Nevada State Law

If the Nevada Supreme Court affirms a lower court’s ruling that a private sale of real property by a receiver constitutes a foreclosure sale, the lending industry (e.g., lenders, special servicers and maybe borrowers) will lose the ability to seek deficiency judgments in Nevada unless the parties comply with state statutory foreclosure requirements.… Continue Reading

Dechert’s OnPoint: Underwater Mortgages Deserve More than Eminent Domain

Mortgage Resolution Partners (“MRP”), a San Francisco-based venture-capital firm, continues to actively market its proposal to assist homeowners with underwater performing mortgage loans held in private label securitization by having such loans seized, refinanced, or restructured and sold to third party investors, with the government recovering the administration costs and MRP earning a fee on … Continue Reading

IMN’s REO-to-Rental Forum 2013: Welcome to Miami

The Miami Heat’s home playoff games are not going to be the only events drawing attention to sunny Miami next week as IMN hosts its annual REO-to-Rental Forum in Miami. As we have previously discussed numerous times (here, here and here, and OnPoint Updates here and here), the REO-to-Rental asset class has become quite a hot … Continue Reading

No Marriage for Mortgage Resolution Partners Yet (But Proposal Still Being Considered)

Last summer, we at Crunched Credit wrote (here, here and here) about Mortgage Resolution Partner’s (“MRP”), a San Francisco-based venture-capital firm, proposal whereby underwater performing residential mortgage loans held in private label securitization would be seized, refinanced, or restructured and sold to third party investors, with the government recovering the administration costs and MRP earning … Continue Reading

Left Out in the Cold: New Jersey Court Holds Condemning Authority Not Required to Negotiate with Lenders in Eminent Domain Proceedings

Early last month, in Borough of Merchantville v. Malik & Son, LLC, 429 N.J. Super. 416 (App. Div. 2013), the New Jersey appellate court held that a condemning authority, under the State’s eminent domain law, was not required to negotiate with a mortgagee which had obtained a final judgment of foreclosure on the relevant property, … Continue Reading

A Closer Look at New York’s “Foreclosure Fraud Prevention Act”

Earlier this summer, the New York State Assembly passed the “Foreclosure Fraud Prevention Act of 2012” which imposes criminal liability on those in the residential mortgage business who use allegedly fraudulent and deceptive practices in connection with a foreclosure action, and the Managers who “recklessly tolerate” any such practices. Despite the swift passage in the … Continue Reading

Massachusetts Lenders Can Find Solace in Eaton v. Federal National Mortgage Association

We previously covered the Massachusetts Supreme Judicial Court’s decisions in Ibanez and Bevilacqua on these pages, in which the court gave Massachusetts lenders agita when it upheld lower court decisions invalidating residential mortgage foreclosures.  In a recent decision in Eaton v. Federal National Mortgage Association, the SJC set the record straight by clarifying foreclosure requirements … Continue Reading

REO to Rental: Treating the Symptoms and Not the Disease

Earlier this month I was a panelist at the HOPE NOW REO Symposium in DC. The Symposium brought together residential mortgage loan servicers, community non-profits, private equity investors, government agencies and lenders to discuss the growing number of REO on the balance sheets of Fannie, Freddie and private mortgage lenders. I participated in a panel that focused … Continue Reading

More About that Chicago Vacant Buildings Ordinance

In August I wrote about an amendment to a Chicago vacant buildings ordinance that I thought (and I was one of many) was crazy, despite being sympathetic to the plight resulting from the city’s blight. The City of Chicago subsequently passed a less onerous, yet still problematic, vacant buildings ordinance effective as of November 19, … Continue Reading

Supreme Judicial Court Casts Doubt on State of Title for Thousands of Massachusetts Homeowners

The fallout from Ibanez continues in the Bay State.  As I (fearfully) predicted earlier this year, the SJC of Massachusetts (in its second foreclosure-related ruling of 2011) has affirmed a lower court’s decision in Bevilacqua v. Rodriguez.  The SJC ruled Tuesday that Mr. Bevilacqua lacked clear title to a home he purchased from U.S. Bank (which had obtained title via a challenged … Continue Reading

May There Be Enough Wind in Chicago to Blow This Ordinance Amendment Away

Sure, vacant properties bring to mind decay, blight, vandalism and the like, and Chicago’s south and west sides are plagued (pdf) with vacant properties; but is the answer requiring lenders to shoulder the responsibility (and liability) for the maintenance and upkeep of these properties? Chicago Mayor Rahm Emanuel thinks so. On July 28, Chicago’s City … Continue Reading

Ibanez Foreclosure Decision a Concern for Massachusetts Lenders

In a widely-covered slip opinion issued late last week, the Supreme Judicial Court of Massachusetts denied two securitization trustees’ requests to quiet title with respect to a pair of foreclosed homes. Press reaction was fast and perhaps a touch too furious – CNN Money hailed the Court giving “banks a ‘beat-down’ over foreclosures”, while Reuters used the … Continue Reading

Foreclosure Crisis: Much Ado About MERS?

Of the many stories that garnered national coverage during Tuesday’s midterm elections, Thomas Miller’s successful election to an eighth term as Iowa’s Attorney General went largely unnoticed by the talking heads at MSNBC and Fox. Miller is the point-man for the 50-state investigation into the burgeoning mess the media likes to call the “Foreclosure Crisis”. … Continue Reading