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Loan Sale Toolkit (Commercial Real Estate) (National and Select States)
Practical Law Toolkit w-041-4187 (Approx. 7 pages)
Loan Sale Toolkit (Commercial Real Estate) (National and Select States)
by Practical Law Real Estate
| Maintained • ExpandCalifornia, Florida, Illinois...Massachusetts, New Jersey, New York, Ohio, Pennsylvania, Texas, USA (National/Federal) |
A Toolkit containing a compilation of resources pertaining to the private sale of mortgage loans. The resources in this Toolkit explain each stage of a loan sale transaction from the bidding process to post-closing actions. This Toolkit contains resources that provide drafting, due diligence, and closing guidance for loan buyers, sellers, and their counsel, however, it is not intended for warehouse loan sales or loan sales in connection with a securitization.
This Toolkit contains resources pertaining to mortgage loan sales. Unless prohibited under the loan documents or by applicable law, mortgage lenders generally have the right to sell the loans they own. Mortgage lenders sell loans in a private sale for many reasons, including to raise revenue, move non-performing loans off the lender's balance sheet, or to rebalance the composition or risk profile of their loan portfolio. The resources in this Toolkit can be used in any state but may need to be customized to conform to governing state law (see also Multistate Resources (Selected States)).
Loans Not Within the Scope of This Toolkit
Some loan sales and transfers are outside the scope of this Toolkit. This Toolkit does not pertain to:
- A sale in a secondary mortgage market transaction known as a securitization. Securitizations are governed by federal securities laws that require the seller to make specific disclosures. Loans sold into securitization must also meet specific criteria (see Practice Note, Commercial Mortgage-Backed Securities (CMBS) Finance: Overview).
- A transfer or collateral assignment of a loan to raise capital by leveraging the lender's interests in that loan (see Practice Note, Mortgage Loan Warehouse Lending: Overview).
The tax implications of a loan sale are also outside the scope of the resources contained in this Toolkit.
Multistate Resources (Selected States)
Although the parties to a loan sale transaction are free to select the state law that will govern the loan sale transaction, the documents that transfer ownership to the underlying notes and mortgages must satisfy all transfer and recording requirements imposed by the mortgaged property's state.