Loans

News & Analysis as of

Valid at Inception Rule Shot Down by the Second Circuit

Marketplace lenders and investors that purchase interests in loans originated by banks should pay close attention as it could spawn a host of class action lawsuits if left standing. In a controversial opinion decided on...more

IRS Ruling Addresses LLC Eligibility for Cancellation of Debt Exception

In new CCA 201525010, the IRS addressed the issue of whether a general “exculpatory” debt of an LLC is recourse or non-recourse for purposes of classifying debt-relief as potential cancellation of debt (COD) income. Recourse...more

Second Circuit Decision Could Disrupt Secondary Market for Bank-Originated Loans

A May 22, 2015 decision by the U.S. Court of Appeals for the Second Circuit appears to disturb the generally settled body of law concerning the status of non-bank investors with respect to applicable usury laws for...more

Voluntary Reporting of Bank Loans – Best Practice or Sword of Damocles?

One of the hottest current topics in the world of municipal finance is the issue of the “voluntary” reporting on the Municipal Securities Rulemaking Board’s (“MSRB”) Electronic Municipal Marketplace Access system (“EMMA”) of...more

New Rhode Island Banking Regulations to Promote Uniformity

Rhode Island has repealed certain banking regulations and replaced them with new regulations in order to promote uniformity. Banking Regulations 98-14 “Licensees”, 98-14.1 “Lenders and Loan Brokers”, and 98-14.4 “Check...more

Real Property 101 for Community Bankers in the Spilman Footprint

What is the difference between a Deed of Trust and a Mortgage? The terms “Deed of Trust” and “mortgage” are often used by people interchangeably. Both serve to give the lender a lien as collateral for a loan but, these...more

Special Alert: Second Circuit Decision Threatens To Upset Secondary Credit Markets

The Second Circuit Court of Appeals’ recent decision in Madden v. Midland Funding, LLC held that a nonbank entity taking assignment of debts originated by a national bank is not entitled to protection under the National Bank...more

Changes To Loan Notes: Good Faith Not Implied

In Dennis Edward Myers & anr v Kestrel Acquisitions Ltd & ors [2015] EWHC 916 (Ch), 31 March 2015, the High Court refused to imply an obligation of good faith into a term allowing modifications of loan notes. ...more

Second Circuit Holds Application of State Usury Laws to Third-Party Debt Purchasers Not Preempted by National Bank Act

On May 22, 2015, in Madden v. Midland Funding, LLC (“Madden”), the United States Court of Appeals for the Second Circuit held that the application of state usury laws to third-party assignees is not preempted by the National...more

Constitutional Court of Azerbaijan Rules on Legality of Loans Denominated in Foreign Currency

One consequence of this move was that loans granted by local banks to local customers in foreign currency became more expensive, because the Azerbaijani Manat was weakened by 25 percent. This raised a question of whether...more

Storm clouds on the horizon. . . foreign real estate investments in secondary US markets

Commercial real estate assets in major markets such as New York City, Washington, DC, Boston, Chicago, Los Angeles and San Francisco have experienced a strong rebound in values and are being transacted near, or above, their...more

Great News for Lenders—A Recent Decision Further Limits the Sham Guaranty Defense

Recently, and shortly after my visit to several lender clients to make presentations regarding, among other topics, the enforceability of commercial guaranty agreements and the sham guaranty defense, the California Court of...more

Intra-Family Loans: An Estate Planning Strategy in a Low-Interest-Rate Environment

In the current economic environment, IRS-prescribed monthly interest rates for certain intra-family transactions are at historic lows. As a result, an excellent opportunity exists to transfer wealth to lower generation family...more

Proxy Puts: Consider With Caution

Directors of a Delaware corporation that enters into a financing agreement with a lender may breach their fiduciary duties if the financing agreement contains a common provision allowing the lender to accelerate and demand...more

A Look at the Friendly Foreclosure Option

When a debtor defaults on a loan secured by personal property, the secured lender has several options for repayment. One option is to sell the collateral securing the debt pursuant to Article 9 of the Uniform Commercial Code...more

CFPB Issues New Manual for Company Responses to Detailed Consumer Complaints

On May 15, the Consumer Financial Protection Bureau ("the Bureau") issued an updated Company Portal Manual (“the Manual”) containing new guidance and instructions for companies to respond to consumer complaints filed with the...more

Deprizio waivers in bankruptcy cases: Valid, or a sham?

The Ninth Circuit Court of Appeals in In Re Adamson Apparel, Inc. became the first appellate court to address the validity of “Deprizio waivers.” In Adamson, the court held that because the Deprizio waiver was not a “sham”...more

House Small Business Committee Hearing on P2P

Last week, the House Small Business Committee held a hearing to discuss the rise of peer-to-peer lending and the availability of capital for small businesses. The testimony from leaders in the P2P sector provides an overview...more

If “builder” baskets grow and “grower” baskets build, what is the difference and are either of these a “scalable” basket?

“Builder” baskets, “grower” baskets and “scalable” baskets: as the leveraged loan and high yield bond markets and the US and European markets continue to converge, technical alerts and debt capital markets updates throw these...more

A Borrower and a Lender Be: Irish Central Bank’s Loan Origination Fund Rules

There has been an increasing focus within Europe on alternatives to bank-based credit. Loan origination funds, which look to source loan assets for their investment portfolio by directly originating loans (rather than...more

Appellate Court Confirms the Validity of Asymmetric Dispute Resolution Clauses

Dechert lawyers representing a major international bank in court proceedings in a number of regions in southern Russia with respect to claims to recover a total of about US$300 million in loan funds from the guarantors of a...more

Ship on course but choppy waters abound! UK Budget 2015: 10 key measures impacting business

Before the Budget was announced, there was natural apprehension that, given the impending general election, the Chancellor would pander to the electorate and sail off course from this Government’s carefully navigated path...more

(US) Are Small Business Administration 504 Loans Exempt from High Volatility Commercial Real Estate Regulations?

As discussed in a prior blog , Basel III regulations governing high volatility commercial real estate (HVCRE) went into effect. The HVCRE rules require lenders to assign a higher risk weighting to loans for the acquisition,...more

Orrick's Financial Industry Week in Review

FHFA Updates Requirements for Freddie and Fannie Sales of Non-Performing Loans - On March 2, FHFA announced changes to requirements for sales of non-performing loans (NPLs) by Freddie and Fannie to reduce the number of...more

Security Interests in Intellectual Property

As collateral for a loan, lenders are accustomed to obtaining a security interest in the property of the borrower. Such property usually includes tangible assets of the borrower such as real estate, machinery and other...more

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