BarbriSFCourseDetails
  1. keyboard_arrow_leftBack

Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Friday, April 26, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

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.

Faculty

Micah J. Halverson
Partner
Kutak Rock LLP

Mr. Halvorson focuses his practice on real estate and corporate finance matters, and he serves as a member of the firm's Executive Committee. He has worked on teams tasked with review and negotiation of commercial office leases including non-REIT landlords and has represented REITs in healthcare real estate acquisition, development and leasing.  Mr. Halvorson leads a team of lawyers who serve as lead counsel to a national bank, assisting their community development lending platform to provide comprehensive lending services in affordable multifamily housing construction utilizing LIHTCs. His banking team also represents multiple super-regional banks in their general commercial lending and healthcare lending platforms, including loans to finance senior living, skilled-nursing, retirement communities and healthcare mergers and acquisitions.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio
Brandon C. Marchiafava
Attorney
Kutak Rock LLP

Mr. Marchiafava represents commercial lenders and developers in a variety of financial transactions, including commercial lending, real estate development projects, sales and acquisitions, and leasing. He has served as counsel to several national banks, assisting their community development lending platforms to provide comprehensive lending services on predevelopment, construction, bridge and permanent loans on multifamily housing projects using Low Income Housing Tax Credits. Mr. Marchiafava also represents regional banks in their general commercial lending and healthcare lending platforms, including: asset based loans, revolving lines of credit, senior housing loans, skilled nursing loans, and other business loans. He routinely represents commercial real estate lenders who originate loans on projects including multifamily housing, condominiums, industrial and self-storage utilizing mortgage, mezzanine and C-PACE financing structures. 

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio

Description

Mortgage modifications allow borrowers and lenders to extend loan maturity, prevent defaults and foreclosure, and otherwise restructure loan terms. They provide an opportunity for lenders to "clean up" documentation ambiguities and potentially contentious issues, 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 restarted.

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 changes protect their clients' interests against potential lien issues, title pitfalls, and bankruptcy concerns.

Outline

  1. 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
  2. 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
  3. 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 discontinuation of creditors' rights coverage in title insurance policies 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?