The SBA Office of Credit Risk Management (“OCRM”), conducts continuous, risk-based lender oversight on all SBA lenders and CDCs. As part of this oversight, the OCRM conducts periodic on-site audits to evaluate the lender or CDC’s portfolio performance, credit administration, compliance with loan program requirements, and SBA operations management. 13 […]
If a borrower is experiencing difficulties making payments on their SBA loan, they may seek relief with the lender or CDC by requesting a loan modification or deferment. When a lender or CDC receives such a request from a borrower, the lender or CDC must be cognizant of the requirements […]
Lenders are responsible for servicing and liquidating all of the 7(a) loans in their portfolio. CDC’s are responsible for servicing 504 loans in their portfolio, but they will only be responsible for liquidating the loan based on its designation. Lenders and CDC’s must be cognizant about their responsibilities and authority […]
Lenders should be cognizant about what expenses are classified by the SBA as recoverable or non-recoverable. The SBA does not pay for non-recoverable expenses, such as any fee or cost incurred that was not necessary, reasonable or customary. In addition, the SBA does not pay for legal expenses for non-routine […]
On September 18, 2020, Florida Governor Ron DeSantis signed House Bill 101, an act relating to public construction, into law. This new law amends Section 218.735, Florida Statutes (the “Local Government Prompt Payment Act”) and Section 255.078, Florida Statutes (the “Florida Prompt Payment Act”), by reducing the maximum retainage rate […]
Parts 1-3 of this series explored alternative pre-foreclosure loss mitigation options for lenders including acceleration and enforcement of personal guarantees. This article explores Section 697.07, Florida Statutes, which governs the assignment of rents. Assignment of Rents under Section 697.07, Florida Statutes Pursuant to Section 697.07, Florida Statutes, a mortgage or […]
On July 1, 2020, the Uniform Commercial Real Estate Receivership Act (“Act”) became law in Florida as part of the newly created Chapter 714 of the Florida Statutes. The Act codifies existing common law in Florida regarding the right to have a receiver appointed by the court in commercial foreclosure […]
In reviewing a loan file after a default by a borrower, lenders should evaluate whether the loan includes an acceleration clause and whether the loan is secured by any personal guaranties. With commercial loans, typically the loan documents will include an acceleration clause, which allows the lender to accelerate all […]
Generally, a commercial landlord does not have a duty to mitigate or reduce its damages after a tenant breaches the commercial lease agreement. See Coast Fed. Savs. & Loan Ass’n v. DeLoach, 362 So. 2d 982, 984 (Fla. 2d DCA 1978). However, there is an exception where the commercial landlord […]
After a borrower default, lenders have multiple options to consider. While foreclosure may be inevitable, with the right facts and strategy, lenders can minimize their risk and maximize their potential recovery. Part 1 of this series provided a general overview of the series and initial considerations for lenders dealing with […]