Best Practices: Lender Liability for Failure to Satisfy a Mortgage
Most state statutes require that any lender who receives full payment of all sums due on a mortgage must satisfy said mortgage following a formal request from the borrower. Recently, there has been an alarming trend amongst even the most sophisticated lenders – said trend pertains to the failure of lenders to timely satisfy or ... Read More
Best Practices: Diligence In Collecting Financials Can Save A Lender Headaches Down The Road
Once a loan has closed, it moves into the lender’s portfolio to be serviced in accordance with that lender’s policies. That servicing continues until the loan is paid in full or until the loan defaults and ends up in a lender’s workout department. Typically, loan documents for commercial loans, including SBA loans, require a borrower ... Read More
Best Practices: Taking the Guesswork Out of Religious Eligibility Determinations
Pursuant to the First Amendment, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. . .” (U.S. Const. Amend I). The First Amendment prohibits Congress from favoring one religion over another. Accordingly, an SBA lender cannot make a loan to a Small Business Applicant that is “principally engaged ... Read More
Best Practices: The Burden of Proving Your Guaranty Purchase Case
In the American criminal justice system, defendants are afforded a presumption of innocence which is derived from the fifth and fourteenth amendments to the Constitution. This standard, which has been enshrined through countless police procedurals and courtroom dramas, has become, in the minds of many people, the commonplace standard of proof in dealings with the ... Read More
Best Practices: The Survey Exception
The U.S. Small Business Administration (“SBA”) National 7(a) Authorization Boilerplate Version 2018 (“Boilerplate”) indicates SBA lenders must obtain a lien on 100% of the interest in the Borrower’s collateral and properly perfect all lien positions as stated in the SBA Loan Authorization. With respect to real estate collateral, Appendix B of the Boilerplate identifies eight ... Read More
Best Practices: Proposed Rule Change: Permissible Fees
On September 28th, the SBA issued proposed rule RIN: 3245-AG74 (“Proposed Rule”) which proposes several changes to SBA’s current regulations. One such change would affect the type and amount of fees that a Lender or Agent may collect from a small business loan applicant (“Applicant”). In response to finding that there is a significant amount ... Read More