Commercial Mortgages & Foreclosure
- Commercial Mortgage Foreclosure
The main collateral for many people and businesses is the real estate it owns.
A commercial mortgage is a grant of a security interest on a parcel of the business’ real estate.
Commercial mortgages allow for greater rights for the bank as compared to residential mortgages, which have greater consumer protections at both state and federal levels.
Drafting best practices for your commercial mortgages are discussed in the video below: be advised – the terms must be in the mortgage BEFORE the foreclosure begins to maximize recovery and control costs.
“A conspicuous Cross-Collateralization clause is only one part of it.”.
A buy sell agreement claims your rights when it comes to difficult situations. Your partner can fall ill or become unable to operate the business the right way. In that case, a buy sell agreement lowers your financial risks of bankrupt or debt. You can protect yourself by signing an agreement that will keep your business intact.
Comparing a buy sell agreement with a prenuptial agreement is the most accurate comparison. In a prenuptial agreement, you can get out of the marriage under certain conditions. At the same time, you can protect your financial operations. A buy sell agreement offers the same rights, just with one small difference. In a buy sell agreement, you can cover all the financial transactions between the business partners. This makes a buy sell agreement more reliable and more effective in terms of financial stability.
Picture of Collateral with foreclosure risk
Here’s the bullet point take aways from the video above.
- waiver of the right of redemption – very often lenders that do not get deep in the weeds of commercial lending for get this – looking at you credit unions – While redemption cannot be waived by consumer mortgages (residential mortgages) commercial mortgages – but if it is just business – you get what you negotiate.
- cross-collateralization languages why – to stave off a 2nd mortgage coming in and having its hand out when other debts secure your mortgage for more on this on our case law update series – PNB v. Banterra Bank. But we stress the 2 points any good cross-collateralization clause requires.
- conspicuous cross-collateral clause on the first page of the document that refers to all debt then or thereafter arising, related or unrelated to the mortgage debt;
- Define indebtedness to include the note amount and all amounts that may be indirectly secured by the cross-collateralization provision.
- Define maximum indebtedness of the mortgage to be twice the mortgage debt to add more strength to cross-collateralization clause.
- Acceleration and deceleration clauses. Our Section council was discussing this last meeting and some were of the opinion that if the bank permits the borrower to reinstate – bring the loan entirely current – it can do so, but there should be some modification that provides for such – in addition to any judicial finding that permits the reinstatement as a borrower only gets one – for 5 years from the date of the dismissal.
- Link to the quoted material regarding recession risk related to rise in credit spread of investment grad bonds from Bloomberg.
We want to help you out on your business journey and explain to you when a corporate liability shield, like an LLC or corporation is needed or not. As small business owners it can be extremely valuable to find guidance in what you should be doing for your business and...
Check kiting is one of the many ways your financial securities can be violated. It constitutes a type of bank fraud very popular in the early 2000’s, that was in its majority shut down by a regulation called check 21 act. Even though not as common as it used...
Real Estate Lawyer
Whether this is your first land use issue or most recent, our office has helped people and businesses alike.
Board Member Agreements & How to control Corporate Owners In the Cannabis Industry, having the right partners is essential. In practice, a lot of times you will be looking at a “49/51 deal” in which one of the partners has a 51 percent and there’s a second partner...