Structuring Mortgage Loan Participation Agreements: Strategies for Lead Lenders and Participants
Drafting Key Provisions, Conducting Lender Due Diligence, Managing Risk; "True Sale" and Perfection
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will prepare lender's counsel to draft and review key provisions of mortgage loan participation agreements and conduct effective due diligence for participating lenders. The panel will also analyze “true sale” and perfection, settlement conventions, and the FDIC advisory regarding risk management for banks.
Outline
- Overview of loan participations
- What is a “participating interest?”
- What are the key characteristics?
- Key participation agreement provisions and how they differ from syndications
- Lender voting rights
- Defaulting lenders
- Borrower workouts, foreclosures
- Seller reps and warranties
- Reclaiming or buying back transferred funds
- Specific considerations
- Circumstances in which a loan participation can be regarded as a “true sale” of the underlying loan
- Circumstances in which a participated loan may be subject to another’s security interest.
- Automatic Perfection
- Settlement conventions/implications of delayed settlement; how loan sellers may obtain settlement liquidity coverage
- Lender due diligence
- Understanding and reducing the selling counterparty risks
- Considering the participation structure
- Additional concerns relating to underlying real estate collateral
- How much do you review of the deal and how much using representations
- FDIC Advisory on Effective Risk Management Practices for Purchased Loans and Purchased Loan Participations
Benefits
The panel will review these and other key issues:
- What are the lessons from recent litigation regarding loan participation agreements?
- What are the key provisions of a mortgage loan participation agreement?
- When will a mortgage loan participation be regarded as a “true sale” of the underlying loan?
- What specific information should participants obtain from the lead lender prior to entering into the transaction?
Faculty
Dr. Alison R. Manzer
Partner
Cassels Brock & Blackwell
Dr. Manzer is a partner in the Banking & Specialty Finance Group and Business Law practice. She has developed... | Read More
Dr. Manzer is a partner in the Banking & Specialty Finance Group and Business Law practice. She has developed expertise in a wide range of practice areas combining skills to work effectively in most corporate/commercial practice areas, with a focus on financial services and structured transactions. Her recent experience includes block chain and fintech applications. Her cross-border expertise has led to several leadership roles in leading U.S. business law organizations such as the American College of Commercial Finance Lawyers and the American Bar Association. Dr. Manzer has written many books on legal topics, primarily in areas of banking and specialized finance, and routinely lectures and speaks on a wide range of topics.
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James C. Schulwolf
Partner
Shipman & Goodwin
Mr. Schulwolf is a partner in Shipman's Business and Corporate Practice Group. He focuses his practice on... | Read More
Mr. Schulwolf is a partner in Shipman's Business and Corporate Practice Group. He focuses his practice on advising clients in financing, investment, acquisition, and restructuring transactions. In the Finance sector, Mr. Schulwolf regularly represents financial institutions including banks, mezzanine funds, and other institutional investors in structuring, documenting, and closing complex senior and mezzanine financings, including mezzanine financings with equity co-investments. He regularly represents lenders in connection with acquisition financings, financing of alternative energy projects (including wind, solar, and fuel cell projects), asset-based loans, cash flow loans, and syndicated credit facilities and he also represents Shipman's corporate clients and private equity portfolio companies in their financing transactions.
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