Commercial Mortgage Modifications: Lien Priority, Title Insurance and Bankruptcy Issues

Structuring Modification Agreements While Avoiding Legal Pitfalls

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, September 25, 2012

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide guidance to counsel for lenders and borrowers on negotiating and documenting commercial mortgage modifications, while protecting their clients’ interests against potential lien priority challenges, title pitfalls and bankruptcy issues.

Description

Mortgage modifications allow loan terms to be altered to prevent foreclosure. They provide an opportunity for lenders to “clean up” documentation ambiguities and potential issues of contention, as well as obtain waivers and releases as part of the consideration for granting the term changes.

Modifications that significantly revise the loan terms increase the risk that subordinate lenders and bankruptcy trustees may challenge the priority of liens encumbering the mortgaged property. This is particularly true when a modification relates to an incomplete construction project that is being re-started.

Title insurance policies have discontinued creditors’ rights coverage and do not protect against a loss of lien position. They have also significantly reduced or altered the scope of mechanics’ lien coverage. Counsel involved with loan modifications must know how to obtain the optimal title insurance coverage.

Listen as our authoritative panel of attorneys discusses current trends in commercial mortgage modifications and strategies for lenders' and borrowers' counsel to ensure that modifications protect their clients' interests against potential lien issues, title pitfalls and bankruptcy concerns.

READ MORE

Outline

  1. Popular objectives and current trends for loan modifications
    1. Modifying loans for construction that stalled then re-started
    2. Extending maturity date; changing or removing extension options
    3. Adjusting loan amount; obligatory vs. optional advances
    4. Changing interest rate; bifurcating the rate
    5. Modifying payment provisions
    6. Changing, adding or releasing collateral securing the loan
    7. Modifying disbursement provisions to re-start a dormant construction project
  2. Key legal considerations to address with a loan modification
    1. Priority issues, including the effect of intercreditor agreements
    2. Title insurance—creditors' rights exclusions and available endorsements
    3. Title insurance—changes in mechanics' lien protections for lenders and related issues impacting borrowers and guarantors
    4. The threat of bankruptcy, and documenting the possibility
  3. Documentation strategies
    1. Role of third parties
    2. Recordable and non-recordable documents
    3. Loan clean-up and clarification

Benefits

The panel will review these and other key questions:

  • What lien enforceability issues must lenders consider when amending or modifying a commercial mortgage loan?
  • How has the national title insurance companies' decision to discontinue creditors' rights coverage impacted mortgage modification transactions?
  • What is the optimal title insurance coverage in a modification transaction?
  • What bankruptcy issues should lenders and borrowers anticipate and proactively protect against in the mortgage modification documents?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

David R. Brittain
David R. Brittain

Partner
Trenam Kemker

His practice includes real estate development, transactions and finance, commercial leasing, and condominium law. He...  |  Read More

Anthony A. Arostegui
Anthony A. Arostegui

Partner
Nossaman

His practice is focused on complex real estate transactions involving acquisition and divestment of real estate,...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Audio

$297

Download

$297