Selling Free and Clear of Mechanics Liens Thru Receivership: The Basics

An experienced receiver working closely with a sophisticated title insurance company can usually obtain free and clear title for the sales of new condo and tract tract home subdivisions on a retail basis. Here’s how….

2009: The Year Lenders “Recapitalize to Survive”

If 2008 was the Year of Denial, 2009 will be the Year of Recapitalization.  How much recapitalization? Investment bank Keefe, Bruyette & Woods projects that United States Banks might need as much as an additional $1 trillion in capital, according to the April 24, 2009 edition of the New York Times.

Housing Prices, BB’s and the Bottom of a Bucket

How long will it take before housing prices go up again? In reply to that question, I typically respond, “It will probably take a while longer than most people think and will look a lot like the bottom of a bucket.” When I’m asked why, I’ll usually ask them a question in return: “How long would it take to pick up two million BBs off the beach?” Whomever I’m speaking with usually gives me a puzzled and slightly annoyed look and says, “What’s that got to do with the bottom of a bucket, or, more importantly, when the real estate market will hit bottom or what the bottom will look like? And, for that matter, what’s the bottom of a bucket got to do with anything, anyway?”  Its been the best way I can think of to explain my view of the housing market.

CMBS Tranche Wars: The Next Wave of Zombie Real Estate

Remember how the residential real estate markets froze-up beginning in late 2007?  Well, the same thing is now happening in commercial real estate.  Read on….

What Is A Receiver? Why You Should Know….

What is a receiver? A receiver is an agent of the state or federal court who typically takes possession and control of real estate or a business as a neutral third party pursuant to a court order.  A receiver is frequently appointed at the request of a lender whose loan has gone into default in order to protect the lenders collateral.

Why should you know what a receiver is?  Lenders are increasingly looking to receivers to take control of, complete and/or sell the commercial property securing their non-performing loans. This is particularly the case with new condominium and tract housing developments (especially those that have homeowners associations), since a receiver can effectively insulate lenders from the onerous long term construction defects liability and related consumer protection obligations that come with this type of real estate.

Yes, Receivers Can Sell Real Estate Free and Clear of Mechanics Liens

Yes, receivers can sell real estate free and clear of mechanics liens.

This is not well known though – not even by title companies, highly experienced bank attorneys or many of the most experienced receivers.  Not because these folks aren’t knowledgeable and sophisticated, but rather simply because there hasn’t been much call for selling real estate by receivers, so the area is full of myth and legend and misinformation.

Receivers May Reduce a Lenders Tax Liability on the Sale of Subdivisions

Marc Brooks called me the other day and announced, ”You know, a lender who forecloses on a new subdivision development that was collateral for a non-performing loan may have to pay ordinary income taxes on all of the sales proceeds as a real estate ‘dealer’. On the other hand, when a borrower or a court appointed receiver sells out the subdivision and pays down the loan, the lender gets to remain a lender.”

Look Out Below: Investors Are Buying & Foreclosing CFD Infrastructure Bonds to Acquire New Housing Subdivisions

So I’m sitting at lunch with some of the other speakers at a recent commercial loan workout conference (I was speaking on the use of receivers to complete and sell new housing projects), and someone mentions that vulture investors are buying, and in some cases foreclosing on, CFD and Mello Roos bonds to acquire distressed tract housing developments.

Where’s the Bottom? March of the Zombies

Several months ago I earnestly asked a friend of mine who is a land economist, “Where’s the bottom of this housing market?” and he promptly answered, “I don’t know.”  However, being persistent, I asked again. This time he answered, “Well if you could tell me how much zombie housing is out there, I could make an intelligent guess.”

SB 800 Construction Defects Liability: Why Should Construction Lenders Care?

As a receiver completing new condominium and tract housing projects, the subject of California SB 800 long term construction defects liability comes up a lot.  So I asked noted subdivision and DRE lawyer Robert Smylie of Robert Smylie & Associates to recap the issues for me.  His explanation follows (with some paraphrasing on my part with his permission). Of course, I’m not a lawyer, so those of you with further questions should contact him directly at rsmylie@smylieandassociates.com, or read his article at  http://www.waldrealtyadvisors.com/downloads/download.html: