Commercial Mortgage Modifications: Lien Priority, Title Insurance, and Bankruptcy Issues
Structuring Modification Agreements While Avoiding Legal Pitfalls
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will guide lenders' and borrowers' counsel on negotiating and documenting commercial mortgage modifications while protecting their clients' interests against potential lien priority challenges, title pitfalls, and bankruptcy issues.
Outline
- Popular objectives and current trends for loan modifications
- Modifying loans for construction that stalled then restarted
- Extending maturity date; changing or removing extension options
- Adjusting loan amount; obligatory vs. optional advances
- Changing interest rate; bifurcating the rate
- Modifying payment provisions
- Changing, adding, or releasing collateral securing the loan
- Modifying disbursement provisions to restart a dormant construction project
- Key legal considerations to address with a loan modification
- Priority issues, including the impact of intercreditor agreements and lien bifurcation
- Title insurance: creditors' rights exclusions and available endorsements
- Title insurance: changes in mechanics' lien protections for lenders and related issues impacting borrowers and guarantors
- The threat of bankruptcy and documenting the possibility
- Pre-negotiation agreements
- Governing law in multi-property transactions
- Documentation strategies
- Role of third parties and estoppels
- Recordable and non-recordable documents
- Loan cleanup and clarification
Benefits
The panel will review these and other noteworthy questions:
- When amending or modifying a commercial mortgage loan, what lien enforceability issues must lenders consider?
- 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?
Faculty
Chauncey M. Swalwell
Partner
Goodwin Procter
Mr. Swalwell focuses his practice on commercial real estate and represents private and institutional investors and... | Read More
Mr. Swalwell focuses his practice on commercial real estate and represents private and institutional investors and lenders in connection with the acquisition, sale, development, leasing and financing of hotels, student housing facilities, industrial parks, office buildings, regional shopping centers and other projects, including the structuring of complex transactions involving public and private REITs, TICs and other investment and lending vehicles. Mr. Swalwell has extensive experience structuring and negotiating joint venture agreements on behalf of private equity and institutional investors and promoters in a broad array of real estate transactions. He also represents both lenders and borrowers in negotiating a variety of commercial lending transactions, including the origination and restructuring of such transactions. In addition, his practice includes representing both buyers and sellers in the negotiation of purchase and sale contracts, along with a wide range of other real estate-related transactions and issues.
Close
Gabriel J. Schnitzler
Real Estate Attorney
Schnitzler Law
Mr. Schnitzler works with commercial real estate, health care, technology, and energy clients in the acquisition,... | Read More
Mr. Schnitzler works with commercial real estate, health care, technology, and energy clients in the acquisition, leasing, sale, financing and development of office, multifamily, industrial and R&D properties. Among other matters he has represented a landlord in negotiation of 1,000,000 square foot rooftop lease to solar developer and has represented a real estate fund in securing a $250 million syndicated financing with a revolving credit facility, secured by a portfolio of West Coast office properties.
Close
Erin F. Natter
Member
Mintz Levin Cohn Ferris Glovsky and Popeo
Ms. Natter has significant experience representing institutional lenders, real estate funds, opportunity funds, and... | Read More
Ms. Natter has significant experience representing institutional lenders, real estate funds, opportunity funds, and other real estate investors in sophisticated real estate finance, purchase and sales, sale-leaseback, and lease transactions involving a broad range of real estate assets--from five-star, full-service resorts, to office and retail buildings, to multifamily and mixed-use projects. She has negotiated many complex, high-value transactions. In a recent $1.5 billion acquisition, Ms. Natter represented an opportunity fund as the purchaser/landlord/borrower of 33 net-leased properties made up of various real property asset classes located in the U.S. and Canada. She has negotiated favorable agreements on behalf of lenders and borrowers in connection with mortgage and mezzanine financing transactions, sale-leaseback transactions, and CDO transactions; handled large multi-property loan, acquisition, and sale-leaseback transactions; and negotiated commercial office leases, termination agreements, assignments, subordination agreements, and licenses.
Close