Construction Finance Modifications and Workouts: Key Considerations for Lenders and Distressed Borrowers
Responding to Project Shutdowns and Delays
Course Details
- smart_display Format
Live Online with Live Q&A
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Real Property - Finance
- event Date
Tuesday, October 7, 2025
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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.
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.
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.
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.
Supply chain disruption, worker shortages, and rising costs due to tariffs 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 also be problematic. State law may require the lender to file a notice of modification to protect its lien priority.
Listen as our authoritative panel discusses construction loan issues resulting from economic disruptions and best practices for working out and modifying distressed loans.
I. Impact of supply chain issues, shortage of workers, and other outside factors on construction loans and the construction industry
II. Communicating with parties to construction projects and construction loans
III. Pre-workout agreement
IV. Assessing the value of the project
V. Optional vs. obligatory advances
VI. Insurance coverage: property insurance, business interruption, business income
VII. Lender alternatives in the event of default
VIII. Key provisions to include in the loan modification agreement
IX. Specific issues related to construction loans in the current distressed market
The panel will review these and other issues:
- How have current market and economic conditions 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 when entering into a construction loan modification?
- How should the lender proceed if a construction loan goes into default?
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