News & Analysis as of November 21, 2024

Loan Modifications

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Loan modifications are changes made to the terms of an existing loan outside the specifications contained in the original loan agreement. In a mortgage situation, loan modifications are typically made to assist borrowers in meeting their obligations and avoid foreclosure. Such mortgage loan modifications may include reduction of principal amount or interest rate, lengthening of loan term, and monthly payment caps. less -

Massachusetts AG Settles with Mortgage Servicer over “Zombie” Mortgages

Cozen O'Connor on 10/11/2024

Massachusetts AG Andrea Campbell settled with Franklin Credit Management Corporation (Franklin Credit), to resolve allegations that the mortgage servicer violated the commonwealth’s foreclosure-prevention law and debt...more

Lender FAQs: Understanding Texas Home Equity Loan Modifications

McGlinchey Stafford on 10/4/2024

As interest rates decline in 2024, lenders who make home loans to Texas residents are seeing an uptick in loan modification requests. Although a “mod” for a conventional loan is straightforward, there are – as always – unique...more

CFPB Takes Action Against Mortgage Servicer for Alleged Order Violations and Servicing Errors

Hudson Cook, LLP on 8/26/2024

On August 21, 2024, the CFPB issued a Consent Order against the Company citing alleged failure to provide accurate information about loss mitigation options and improper handling of loan modifications. The Consent Order...more

Essential Strategies for Managing Maturing CRE Loans in Today's Market

Womble Bond Dickinson on 8/1/2024

The commercial real estate industry is facing an impending tsunami of $2 trillion in debt maturities, with an estimated $929 billion coming due this year. If you will be caught in this net because the loan secured by your CRE...more

Understanding Workout Agreements for Commercial Real Estate Loans in Default

Tonkon Torp LLP on 7/25/2024

When commercial real estate loans go into default, workouts are often pursued to resolve the default by agreement. What are the common forms of workout agreements? For commercial real estate borrowers in default, it’s...more

VA Announces “Targeted Foreclosure Moratorium” on VA Loans Through December 31, 2024

Troutman Pepper on 6/3/2024

On May 29, the Department of Veterans Affairs (VA) announced a targeted foreclosure moratorium on VA-guaranteed loans intended to allow servicers sufficient time to implement the Veterans Affairs Servicing Purchase (VASP)...more

Ninth Circuit Holds Loan Modification Made By Unlicensed Lender Violates State Usury Law

Sheppard Mullin Richter & Hampton LLP on 5/6/2024

In an April 16 unpublished opinion, the U.S. Ninth Circuit Court of Appeals affirmed the Bankruptcy Appellate Panel’s earlier decision finding that a mortgage lender not licensed in California violated the state’s usury law...more

Department of Veterans Affairs Enacts Sweeping Loss Mitigation Program Changes

Ballard Spahr LLP on 4/30/2024

The Department of Veterans Affairs (VA) made significant changes to its loss mitigation program this month, launching its awaited Veterans Affairs Servicing Purchase Program, and implementing a 40-year loan modification term....more

VA Urges Servicers to Implement Foreclosure Moratorium on VA Loans

Ballard Spahr LLP on 12/4/2023

The U.S. Department of Veterans Affairs (VA) recently issued Circular 26-23-25 in which VA “is strongly encouraging a foreclosure moratorium on all VA-guaranteed loans through May 31, 2024.” Additionally, VA “urges servicers...more

The New York Lien Law - Top Ten Things You Ought to Know

White and Williams LLP on 11/13/2023

Over the course of my career, I have had the privilege of working with and representing numerous construction lenders (and borrowers/developers) in the financing of some of the largest commercial projects in the United...more

Title Insurance Client Alert - June 2023

Kaufman & Canoles on 6/13/2023

Recently, the Circuit Court of Arlington County, Virginia, issued an important decision involving the modification and enforcement of deeds of trust. In Mahaley v. Metters, CL21002581-00/01, 2023 Va. Cir. LEXIS 80 (Arlington...more

We Can Work It Out: The Need for Pre-Negotiation Agreements

Cadwalader, Wickersham & Taft LLP on 6/1/2023

In light of the current economic climate, real estate lenders and borrowers will certainly be communicating with one another frequently concerning potential loan modifications and accommodations. It is prudent for lenders to...more

[Hybrid Event] Navigating the Distressed Commercial Real Estate Environment Ahead: Out of Court Considerations - June 7th, New...

Vinson & Elkins LLP on 5/31/2023

In this program, attorneys in the Restructuring & Reorganization, Real Estate, Tax, and REIT Capital Markets practices discuss the various out of court considerations that commercial real estate enterprises will want to...more

11th Circuit: ECOA anti-discrimination provision against requiring spousal signature does not apply to defaulted mortgage during...

Orrick, Herrington & Sutcliffe LLP on 5/8/2023

On April 27, the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court’s decision to enter judgment in favor of a defendant national bank following a bench trial related to claims arising from foreclosure...more

Loan Modifications and Pool Management in a CRE CLO

Dechert LLP on 5/8/2023

Key Takeaways - CRE CLOs are attractive exit strategies for lenders of commercial bridge loans, in part due to the flexibility the structure provides in the modification of performing loans. n light of adverse...more

HUD establishes 40-year loss-mit option

Orrick, Herrington & Sutcliffe LLP on 3/10/2023

On March 8, HUD published a final rule in the Federal Register to allow mortgagees to increase the maximum term of a loan modification from 360 to 480 months for FHA-insured mortgages after a borrower defaults. ...more

HUD Finalizes Rule Providing for 40-Year FHA Loan Modifications

Ballard Spahr LLP on 3/9/2023

The U.S. Department of Housing and Urban Development (HUD) recently issued a final rule extending the maximum term of an FHA loan modification from 30 to 40 years. The rule is effective May 8, 2023. HUD also issued Mortgagee...more

Saving Loans for REMICs

Cadwalader, Wickersham & Taft LLP on 2/24/2023

Under the REMIC rules, a mortgage loan ceases to be a good REMIC asset if the borrower replaces the real property collateral with government securities (known as defeasance) less than two years after the REMIC’s startup date....more

FDIC announces Georgia disaster relief

Orrick, Herrington & Sutcliffe LLP on 1/25/2023

On January 20, the FDIC issued FIL-05-2023 to provide regulatory relief to financial institutions and help facilitate recovery in areas of Georgia affected by severe storms, straight-line winds, and tornadoes on January 12. ...more

More Trouble Ahead for the Mortgage Industry If Ginnie Mae’s Risk-Based Capital Requirements Take Effect

Sheppard Mullin Richter & Hampton LLP on 12/20/2022

The new Ginnie Mae issuer financial requirements, first published on August 17, 2022 in APM 22-09 by joint announcement with the Federal Housing Finance Agency, are scheduled to take effect in two parts beginning September...more

Nutter Bank Report: November 2022

Nutter McClennen & Fish LLP on 11/30/2022

Headlines: CFPB Reminds Credit Bureaus and Furnishers of Their Obligations to Investigate Disputes The CFPB has issued guidance on the obligations of both credit bureaus and furnishers of consumer credit information,...more

FTC Joins with California DFPI to Obtain Asset Freeze Against Mortgage Relief Business

Venable LLP on 9/23/2022

Last week, the Federal Trade Commission turned its attention to the mortgage relief industry once again. In its most recent enforcement action, the FTC joined forces for the first time with the California Department of...more

Lenders Have No Duty to “Process, Review, and Respond Carefully and Completely” to Loan Modification Applications

Patton Sullivan Brodehl LLP on 4/29/2022

One of the unresolved issues over the past several years in the realm of lender liability law is whether lenders owe tort duties to borrowers in connection with loan modification applications. Until now, case law has been all...more

California Supreme Court Weighs In on Negligence Claims Related to Mortgage Loan Modifications

Snell & Wilmer on 3/22/2022

On March 7, the California Supreme Court settled the issue of whether a mortgage servicer owes a duty of care to a borrower in the context of loan modification review, holding that negligence claims related to loan...more

California Supreme Court Rules No Tort Duty of Care Required by Lenders When Considering Borrowers’ Loan Modification Requests

Perkins Coie on 3/15/2022

The Supreme Court of California handed down a big win to mortgage lenders and servicers on March 7, 2022, when it issued a decision in Sheen v. Wells Fargo Bank, National Association et al., No. S258019, 2022 WL 664722, at *1...more

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Loan Modifications

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