We understand the intricacies of preparing loan modifications and forbearance agreements from the lender's perspective. Choosing the right agreement is crucial, as the wrong choice can lead to complications.
Key Differences and Decision-Making
Loan modifications are typically preferred when there are no serious defaults by the borrower. Our attorneys will explain the differences and advise lenders on the best approach, preparing the necessary documents efficiently and cost-effectively. We ensure that our forms are current, based on the latest judicial opinions, statutory changes, and best practices.
Legal Complexities and Risks
Loan modifications and forbearance agreements can present significant risks for lenders. Market conditions or borrower circumstances may change, impacting the likelihood of adherence to the agreement's terms. In such cases, providing borrowers with additional flexibility might be in the lender's best interest.
Rosenberg Martin Greenberg helps lenders navigate these complexities, offering guidance to facilitate mutually acceptable solutions. In real property financing, forbearance agreements may be preferable to foreclosure when valuation issues make loss recovery uncertain.
Bankruptcy Risk Protections
To protect lenders in case of a borrower bankruptcy, include additional safeguards:
- Borrower waiver of protection from the automatic stay
- Guarantees by sponsors or principals triggered by bankruptcy
- Friendly foreclosure covenants
- Borrower releases
- Customized Document Drafting
Rosenberg Martin Greenberg is committed to providing lenders with tailored insights for workout and forbearance agreements. We conduct comprehensive reviews of existing agreements and lender priorities to draft documents that comply with statutory requirements, judicial guidance, and industry best practices.