News & Analysis as of

Anti-Deficiency Provisions

SFC Highlights Deficiencies in Asset Management Industry

• The SFC has identified nine common areas of non-compliance in managing funds and discretionary accounts. • The SFC urged licensed corporations to review their existing internal control procedures and operational...more

Nevada Supreme Court Clarifies the Litigation Waiver of the One-Action Rule

by Snell & Wilmer on

Nevada has a one-action rule which, with limited exceptions, requires a creditor seeking to recover a debt secured by real property to proceed against the security first prior to seeking recovery from the debtor personally....more

The Slow Demise Of California’s Sham Guaranty Defense

by Weintraub Tobin on

The California Court of Appeal decision in LSREF2 Clover Property 4, LLC v. Festival Retail Fund 1, LP (2016) 3 Cal.App.5th 1067, struck another blow to California’s “sham guaranty” defense – highlighting a recent string of...more

When the Same Lender Has Both a Senior and Junior Deed of Trust….

If the same lender has both a senior and junior deed of trust on the same security property, can that lender foreclose on the senior lien by trustee’s sale, and then sue the debtor personally for the junior debt?...more

Slam on the Slam – A California Court Further Limits the Sham Guaranty Defense

by Ervin Cohen & Jessup LLP on

There has been much recent California case law regarding the sham guaranty defense and for good reason – success for a guarantor on this defense can eliminate a lender’s recovery of a deficiency against a guarantor of a...more

California appeals court rejects ‘creative’ sham guaranty defense

by Thompson Coburn LLP on

In what can only be described as pure “chutzpah,” a commercial real estate investment fund argued that it was the alter ego of its property-level SPE to avoid liability under a guaranty. While the strategy worked in the trial...more

Recent Arizona Case Law and Other Developments Affecting Real Estate Lending

Recent Arizona Case Law - Dobson Bay Club II DD, LLC v. La Sonrisa De Siena, LLC (AZ Court of Appeals 2016). The borrowers signed a $28.6 million note and DOT to CIBC. The note required interest-only payments with a...more

Recent Arizona Case Law and Legislative Developments Affecting Real Estate Lending

The following information accompany a presentation Mike gave to members of the Arizona Commercial Mortgage Lenders Association (ACMLA) on March 8, 2016. A summary of legislative amendments enacted during the most recent...more

Highmark Properties Revisited: Lender Credit Bids

The dust has yet to settle on the landmark decision of High Point Bank & Trust Co. v. Highmark Properties, LLC, 776 S.E.2d 838 (N.C. 2015). Before delving into the decision that should serve as a harbinger of imminent and...more

A Guaranteed Defense: An Overview of the North Carolina Supreme Court’s Decision in High Point Bank & Trust Co. v. Highmark...

by Ellis & Winters LLP on

Until recently, a common question that arose during foreclosure deficiency actions was whether a guarantor on a loan could raise the anti-deficiency defense set forth in section N.C.G.S. § 45–21.36. This past fall, the North...more

Community Banking Excellence - First Quarter 2016

In This Issue: - Another Perspective: We interviewed Michelle Crook, CFO of the Bank of Botetourt, and Chris Snodgrass, CFO for Bank of Marion, for our Community Banking Excellence this quarter. We wanted to know...more

West Coast Real Estate Update: Feb. 2016 #2

by Holland & Knight LLP on

New Legislation Limits Tax Sharing Agreements - California Senate Bill (SB) 533, which was signed into law in October 2015, went into effect on Jan. 1, 2016, and limits local government from executing tax-sharing...more

California Supreme Court Clarifies Anti-Deficiency Protection after Short Sales Involving Purchase Money Loans

The California Supreme Court has published its much anticipated decision clarifying the scope of anti-deficiency protection under Code of Civil Procedure section 580b after short sales involving purchase money loans in Coker...more

Creditors Rights Suffers a Major Depression in North Carolina

by Nexsen Pruet, PLLC on

So, What can a Lender Count on from a Guarantor? - In 1933, the North Carolina legislature in reaction to the Great Depression enacted certain defenses against alleged abuses by lenders exercising remedies under...more

Looking Back, Looking Forward – A 2015 Retrospective and 2016 Predictions

This past year has seen many changes in the community banking industry. Some of these issues we expected and some had more of an impact than maybe we would have thought. As we reflect and look forward to 2016, we asked...more

The California Supreme Court Will Hear Oral Argument in Coker v. JP Morgan Chase Bank on December 2, 2015

In my last post, I mentioned that the California Supreme Court would soon be deciding an important case — Coker v. JP Morgan Chase Bank — involving an anti-deficiency based challenge to a short sale....more

Guarantors Can Use Anti-Deficiency Statute in North Carolina

The North Carolina Supreme Court recently handed down the final word in a dispute over whether guarantors get the benefit of the state’s anti-deficiency statute after the lender bids on and buys the real property at a...more

Community Banking Excellence - Issue 3, 2015

In This Issue: - Another Perspective - James C. Cherry, Chief Executive Officer, Park Sterling Bank: With more than three decades of experience in banking in North Carolina and Virginia, Park Sterling's CEO James C....more

Deficiency Judgment Cases In North Carolina Just Got A Lot More Complex: CentsAbility: Creditors' Rights Law Update

by Nexsen Pruet, PLLC on

A question that continually arose during the foreclosure deficiency actions that were spurred by the recent “Great Recession,” was whether or not a guarantor on a loan could raise the “defense” offered in N.C. Gen. Stat. §...more

The Case of the Vanishing Guaranty—Issues Facing Commercial Real Property Lenders Regarding Revocable Trust Borrowers

by Ervin Cohen & Jessup LLP on

I have recently received numerous questions from commercial lender clients regarding structuring and enforcing commercial real property loans involving revocable trusts. Their concerns have largely centered on how to...more

Lenders Beware: Future Hurdles to Foreclosure Deficiency Actions May Lie Ahead

by Baker Donelson on

In an update to Kevin Stine’s June 6, 2014 article explaining the Georgia Court of Appeals decision to bid adieu to select foreclosure confirmation hurdles, the District Court for the Northern District of Georgia recently...more

Guarantors Can Waive Anti-Deficiency Protections

by Snell & Wilmer on

In Arizona, guarantors can now be held liable for deficiencies even where borrowers avoid liability due to Arizona’s anti-deficiency statute. Arizona courts have been active in the last few years in addressing the law...more

Are Vacant Lots Protected Under Arizona’s Anti-deficiency Statutes?

by Snell & Wilmer on

No, of course not. Arizona’s anti-deficiency statutes only prohibit deficiency judgments after a trustee’s sale of a “dwelling”. Under no definition can a vacant lot constitute a “dwelling”. This was the Arizona Supreme...more

Arizona Court of Appeals Expands, Then Narrows, Anti-Deficiency Protection

Like many states, Arizona protects homeowners from the “double whammy” of losing their homes to foreclosure and then facing liability for the balance owed on their mortgage loans....more

Certain Residential Developers are Unprotected by the Anti-Deficiency Statute after Foreclosure of a Deed of Trust on Vacant...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute (A.R.S. § 33-814) protects a borrower who started, but never completed, construction...more

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