Lenders 360

News, information and commentary on important issues affecting the financial services industry

Latest from Lenders 360

At the point in time when the economic structure of loan becomes financially unsupportable for the borrower, a lender is faced with a few options.  The lender could simply default the loan and begin collection activity.  Alternatively, the lender could seek to re-work the deal in some way to provide some breathing room for the borrower.  No good deed goes un-punished, so it’s good to understand the impact of the two most common types of…
When making a secured loan, the process of making sure your collateral is actually – legally – your collateral can be more difficult than expected or later determined. The steps are fairly simple, but the analysis and execution can be lacking for a number of technical reasons which can render your first priority lien a junior lien or gone all together if you are not careful. There are numerous opportunities to mess up collateralizing things…
Things are not great in brick and mortar retail, and they really haven’t been for some time.  Most people are aware of this, but this is a quick note on the status of retail bankruptcy cases and the outlook for the year.   In 2017, there were more major retail bankruptcy cases filed than during any given year of the “great recession”.  Twenty-six in total with at least $50MM in liabilities.  Obviously a large number. …
In good times many lenders are willing to approve a loan which is secured only by accounts receivable.  The ability to value A/R seems more straightforward than it actually is when considering underwriting.  There are several legal and practical problems with collecting A/R which will reduce its ultimate value to a lender if the lender ends up needing to monetize the A/R following default.  This post will discuss A/R and collecting the A/R. Let’s begin…
In some recent minor news coverage the issue of attorney-client privilege has come up.  It often is surprising to non-lawyers (and non-litigators) how limited that privilege actually is in scope.  Many clients tend to assume that any conversation with an attorney will be protected.  However, the scope of the attorney client privilege is much more limited, and, not understanding that will result in your “privileged” communications becoming public record. Let’s start with the general rule…
In prior posts I have discussed what bit coin is, in terms of describing the technical aspects of the thing.  Bit coin is only one of numerous non-fiat currencies which currently exist, and seems to be the most common.  In this post I will not be focusing on the technical nature of non-fiat currencies, but rather consider what the character of a non-fiat currency is legally.  Stated more directly, is a bit coin legally a…
Facebook terms reviewed.  This blog is usually not a data security blog (although it’s something I care about); but the recent scandal with Facebook made me curious just what users agree to by using the site.  As the saying goes, “if the product is free, you are the product.” Credit: The Sound of Music, 1965. 20th Century Fox. Say goodbye to you personal data. Full disclosure, I do not maintain a Facebook page.  I understand…
I’ll admit it.  One of my favorite words is “allonge”.  It breaks up my otherwise decumbent register with something exotic.  Legally, it’s a way to assign a promissory note to another party who then has the rights to assert the promissory note against the obligors.  The last post discussed the importance of compliance with simple legal requirements.  But, what happens if the simple act of signing the allonge is done by an entity which doesn’t…
When things go south, it’s the little things that can get you into trouble.  When the servicer on a commercial mortgage sent the notice of foreclosure to the address on the deed of trust, but not to the known updated address of the obligors the obligors counter-sued for breach and the case has been pending now for eight years.  In a recent 5th Circuit opinion, the Court found that failure to serve the proper address…
An appeals court holding, and pending U.S. Supreme Court case, could up-end FDIC enforcement procedures.  One of the interesting recent themes in Game of Thrones is the basis for power.  In these United States, the power of judges originally comes from the United States Constitution.  And, it turns out; if you don’t follow the rules of the Constitution your Court might not actually have any power. Credit: Game of Thrones. Home Box Office, Television 360,…