Construction Finance Modifications and Workouts | CLE Course

BarbriSFCourseDetails

Course Details

Course Information

smart_display Format
On-Demand
signal_cellular_alt Difficulty Level
work Practice Area
Real Property - Finance

Date & Time

event Date
Tuesday, October 11, 2022
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
90 minutes

Credit Information

This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00

CLE

ALL

This CLE course will examine issues presented for construction lenders and borrowers in the current economic environment. The panel will discuss critical concerns for lenders when dealing with financially distressed borrowers and projects that have been delayed or disrupted. The panel will also discuss essential provisions for construction loan modifications and steps to take if the loan goes into default.

Faculty

Jason E. Goldstein

Shareholder, Co-Chair Mortgage Banking Group

Buchalter

Mr. Goldstein specializes in resolving complex business disputes for a diverse cross-section of clients, ranging from national banks to insureds, private money lenders, credit unions, individuals, loan servicers, landowners, pharmaceutical companies, vaping companies, equipment finance companies, brokers and investors. He is Co-Chair of the firm’s Mortgage Banking Group, a fellow of the American College of Mortgage Attorneys (ACMA) and a member of the ACMA Title Insurance Committee. Mr. Goldstein has an extensive legal background in state and federal courts across the country, which includes business litigation, real property related litigation, “private money,” title insurance claims and litigation (as well as CGL, D&O, etc.), escrow claims and litigation and misappropriation of trade secrets litigation. He also handles litigation involving wrongful foreclosure, lender liability defense, leases (commercial, residential and equipment), general contractors, receiverships and judicial foreclosures.

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John L. Hosack

Shareholder

Buchalter

Mr. Hosack focuses his transactional practice on commercial real property loan documentation, loan workouts, REO sales and foreclosures. He represents secured lenders and property owners at trial and on appeal in complex real property disputes, including lender liability, fraud, class actions, breaches of contract, wrongful foreclosures, mechanic’s liens, stop notices, judicial foreclosures, receiverships, escrow claims and title insurance claims.

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Enrique Rodriguez

Founder and Principal

Rodriguez & Associates

Mr. Rodriguez is a qualified expert in banking and real estate matters and for the past 17 years has provided a wide variety of real estate brokerage, financial advisory, consulting, litigation support and expert witness services to his clients. He advises law firms, development companies, financial institutions and investors on standard lending practices, market rates of interest, and other business transactions which often involve tens of millions of dollars. He is knowledgeable of capital markets and financing transactions and, as a licensed real estate broker, procures debt and equity capital for his clients from financing sources which include banks, life insurance companies, pension funds, REIT’s and conduit lenders.

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Description

Supply chain disruption and worker shortages can cause construction delays and, in some instances, the shutdown of ongoing projects. The result may increase carrying costs for developers, extend timelines for completion, and require changes in building plans or design. All of these factors have ramifications for the construction loan and the borrower's financial health. Construction lenders must be able to respond to a default scenario or with a loan modification that facilitates the completion of the project and eventual repayment of the loan.

Threshold questions include whether a project has lost value and the ability of contractors, subcontractors, architects, and suppliers to perform under the construction contract. Parties must identify whether insurance coverage is available to cover losses associated with disruptions, the disbursement obligations of the lender under the loan agreement, and the financial condition of the borrower and guarantors.

Construction loan modifications present particular problems for lenders. All interested loan parties, including loan servicers and participants, must consent to changes. Determining the status of the title and any competing liens may be problematic, as title offices may have a backlog due to government-mandated closures. State law may require the lender to file a notice of modification to protect its lien priority. Further issues may arise on the site if the pandemic continues to impact contractors and suppliers.

Listen as our authoritative panel discusses construction loan issues resulting from COVID-19 economic disruptions and best practices for working out and modifying distressed loans.

Outline

Impact of supply chain issues and shortage of workers on construction loans and the construction industry
Communicating with parties to construction projects and construction loans
Pre-workout agreement
Assessing the value of the project post-pandemic
Optional vs. obligatory advances
Insurance coverage: property insurance, business interruption, business income
Lender alternatives in the event of default
Key provisions to include in the loan modification agreement
Specific issues related to construction loans during the pandemic

Benefits

The panel will review these and other issues:

How has COVID-19 impacted ongoing construction project plans and timelines?
What are the ramifications for borrowers, lenders, and project valuations?
What are the lender's and borrower's primary concerns in entering into a construction loan modification?
How should the lender proceed if a construction loan goes into default?