Current Issues and Complexities With Real Estate Owned (REO) Assets
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With the increasing number of distressed assets being acquired or held by lenders for disposition to investors, the distinctions between purchasing distressed debt and REO properties in order to acquire title to real estate assets raise significant due diligence and ownership risks that need to be identified, addressed and mitigated in order to make investments that have a reasonable probability of yielding a healthy return on investment. This OnDemand Webinar will identify the obvious problems, and expose the more nuanced dangers, that investors face in acquiring distressed assets and will provide both legal and practical solutions to eliminate, where possible, and mitigate, in all other instances, the various risks that are posed in this marketplace. This program is essential for any real estate investor who desires to pursue the acquisition of troubled real estate assets in a market where the sellers predominantly dictate the sale terms and the timing for such transactions.
AuthorsRen R. Hayhurst, Bryan Cave LLP
Overview of Note and REO Sales
• What Is Being Sold, and By Whom?
Due Diligence Issues in REO Sales vs. Note Sales
• Due Diligence Challenges
• Bankruptcy Risks
• Third-Party Liabilities
Practical Obstacles to Note and/or REO Sales
Opportunities to Obtain Hidden Value
• Guaranties, Letters of Credit or Other Credit Enhancements?
• CFD Reimbursement Claims, Tax Refunds or a Tax Increment Financing Scheme?
• Claims for Fraudulent Distributions to a Creditworthy Borrower Affiliate?
• Reserve Accounts?
Alternative Transaction Options
• Alternatives to Foreclosure
• Consensual Foreclosure
• Consensual Bankruptcy
Common REO Issues - Regulatory Considerations for Banks
• Holding Period
• Property Inspection
• Environmental Audit
• Use, Repair and Maintenance Issues
Survey and Title Considerations J
Creditor's Rights Issues
Land Use Considerations
Project Development Challenges