ATLANTA (Sept. 26, 2011) – When faced with non-performing loans, lenders often prefer to sell the note rather than go through the foreclosure process for a variety of practical and financial reasons. That was one of the insights provided in this week’s “Commercial Real Estate Show,” which examines the pressing legal issues facing the commercial real estate sector.
Selling a note often is a quicker process than foreclosure for a lender, and it also enables a lender to avoid paying insurance and real estate taxes on a foreclosed property, said Charlie A. Brake (top right photo) a partner with the Hartman Simons law firm.
Also, “I’ve had some lenders that I work with feel that they actually get a better price by selling the note … because they feel like once they foreclose and take it back, the property is tainted,” Brake added.
Lenders looking to move a note will want to reduce their risks, but prospective buyers should push a lender to make as many representations and warranties as possible when negotiating an agreement, said Sonny G. Morris (middle left photo), a partner with the Morris, Manning & Martin law firm.
As for the borrower, a note sale generally does not mean a better deal, said John F. Isbell (lower right photo), a partner with the Thompson Hine law firm. “Generally, the individual or entity buying the paper is looking to maximize their return just the same as the original lender,” he said.
Morris noted that while large investors such as equity funds account for the majority of note purchasers, smaller investors often are attractive to lenders because of their operating expertise.
For instance, with hotels, smaller investors “can do much better than a fund investor because they actually know how to operate the hotel,” Morris said. “Or, if they were a specialist in operating marinas, they would have the upper hand.”
The show, which also discussed loan workouts, short sales and bankruptcies, is available for download. The show airs Saturday in Atlanta on Biz 1190 at 10am ET and on Talk 920 Sunday at 9am ET.
The next “Commercial Real Estate Show” airs October 1 and will provide an overview of the U.S. restaurant industry.
America’s “Commercial Real Estate Show” is an entertaining and enlightening national talk radio show about commercial real estate. New shows air every Saturday morning at 10AM EST available worldwide at the show website, http://www.creshow.com/ as well as on several AM stations including Atlanta stations biz 1190 Saturday at 10 am and talk 920 Sunday at 9am. Show podcasts are available on-demand at any time worldwide on iTunes and on the show website.
The “Commercial Real Estate Show” has quickly gained a national and international audience. Each show starts with a national commercial real estate market update related to the show topic by well-known national experts. Then the show host Michael Bull and a panel of industry expert guests share information, insight and best practices related to each show’s main topic.
The show host is 30-year commercial real estate veteran Michael Bull (bottom left photo), CCIM, the president and founder of regional commercial brokerage firm Bull Realty, Inc headquartered in Atlanta, Georgia.
Contacts:
Christin Clay
Wilbert News Strategies
1720 Peachtree St, Suite 1040
Atlanta, GA 30309
p 404-965-5025 | m 404-405-2354
Twitter: @christinclay10
Tony Wilbert
Wilbert News Strategies
404.965.5022
Hello Everyone,
ReplyDeleteA mortgage note land contract and have pondered if now is the time to sell the note, then consider the benefits. You will receive a substantial amount of money right now - enough to accomplish some major goals. Thanks...