Between 2021 and 2022, U.S. foreclosure filings rose 104%. Commercial property owners and Borrowers should become familiar with the foreclosure process and strategic legal defenses to prevent foreclosure and defend their commercial property rights.
Katers & Granitz, LLC’s Commercial Foreclosure Defense lawyers represents Borrowers, Business Owners, Commercial Property Developers, and Property Owners in disputes with Lenders, Servicers, Banks, Private Equity Lenders, and others.
Our experienced commercial foreclosure attorneys work to uncover lender liability and debt solutions and restructuring strategies in foreclosure-related matters. We help clients master workouts, negotiate loan terms and amendments, protect their rights, and avoid costly outcomes. Call us today for a free and confidential consultation: 800.669.7782.
What is the Commercial Property Foreclosure Process?
The Commercial Foreclosure Process begins when a Commercial Property Owner or Borrower defaults, or in some case allegedly defaults, on the loan obligations in several potential manners, including, but not limited to, payment failure, violation of covenants, or other technical non-monetary loan term violations. In turn, the Lender may seek to foreclose and ultimately sell the commercial property to pay off the loan.
Upon default, the Lender will typically, and may be required to, send a Notice of Default notifying the Borrower of the alleged default, and offering the Borrower a means to avoid loan acceleration. For example, the Notice of Default may allow the Borrower to avoid acceleration by catching up on any late payments within 30 days.
If any alleged default is not expeditiously remedied, the Lender may accelerate the loan—requesting payment of the entire outstanding balance. After acceleration, the Lender may seek to obtain the property for sale through a nonjudicial or judicial foreclosure process.
Nonjudicial Commercial Foreclosure vs. Judicial Commercial Foreclosure
Thirty-three U.S. states and Washington D.C. allow both judicial and nonjudicial foreclosure as an option for Lenders when Borrowers’ Deeds of Trust or Loan Documents contain a power of sale clause. The nonjudicial foreclosure process happens primarily outside of court and varies according to state law. In general, the Lender must follow specific notice procedures and can then sell the property without the approval of the court.
Seventeen U.S. states (Connecticut, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, and Wisconsin) are judicial foreclosure states, and rarely apply the nonjudicial foreclosure process.
In judicial commercial foreclosure, Lenders must file a court action to initiate the foreclose process. A court will then ultimately decide whether to grant a judgment of foreclosure and grant permission to eh Lender to sell the property securing the Loan. Depending on state law and the underlying Loan Agreements, judicial foreclosure can occur through strict foreclosure, decree of sale foreclosure, or consent foreclosure.
In a judicial commercial foreclosure lawsuit, the defendants may include the Borrowers, the underlying business, guarantors and any other individual or entities who were parties to the Loan Documents. If the commercial property doesn't sell at a price that covers the entire outstanding balance of the loan, the Lender may be able to pursue payment from anyone who signed a guarantee guaranteeing the obligations contained in the Loan Agreement, including the business owner.
The defendants will receive notice or be served with lawsuit; thereby triggering the requirement to file an Answer. If the defendant does not answer that Complaint, the Lender may be granted a default judgment.
If the foreclosure is uncontested, the Lender will ultimately receive judgment and the right to foreclose on the property. If the case proceeds to litigation, the Court will ultimately have to decide if the Lender is entitled to foreclose pursuant to the Loan Documents and whether or not the Borrower has any defenses to the foreclosure. If the court orders a sale of the property, the property will ultimately be sold, the proceeds applied to the outstanding balance of the Loan and the property will be deeded to a new owner upon expiration of any redemption period.
Foreclosure Defense Lawyers Representing Commercial Property Owners
Loan Modification, Forbearance, Reinstatement, Short Sales, Deed In Lieu Of Foreclosure
Due to the public, costly, and time-consuming nature of litigation, our attorneys seek to help Business Owners and Borrowers settle disputes through negotiation, mediation, or other alternative dispute resolution measures when possible. Our seasoned litigators are prepared to represent our clients in court when agreements are unreachable.
We construct thorough, strategic litigation approaches, in conjunction with our clients, to further those clients' interests and protect their rights. Call the Katers & Granitz Commercial Foreclosure Defense Firm today for a private, no-fee consultation: 800.669.7782.
Top Defense Strategies in Commercial Foreclosure
Numerous potential defenses are available to help fight a Lender's commercial foreclosure action. The defenses that are applicable to each case will depend on the specific facts of the underlying case. At Katers & Granitz, LLC we have successfully assisted Commercial Property Owners and Borrowers fight foreclosure by presenting solid evidence of lender neglect, misconduct, or breach of the Loan Agreements, including, but not limited to:
- Equitable estoppel
- Failure to comply with contractual and procedural requirements
- Failure to establish standing to foreclose
- Failure to submit sufficient evidence to establish a right to foreclose and overcome defenses.
- Charging of Excessive Unbargained for Fees
- Violation of Loan Agreements
- Violation of Servicing Agreements
- Lender Errors and Omissions
- Failure to abide by notice provisions in the Loan Documents
- Violation of State of Federal Law
- Breach of the Covenant of Good Faith and Fair Dealing
- Failure to Release Reserve Funds
- Failure to Release Insurance Funds
The number one defense strategy is to act fast and consult with an experienced Commercial Foreclosure Defense Lawyer immediately upon any notice of breach or foreclosure. Our Commercial Foreclosure Defense Attorneys can help you navigate your options and gather the evidence necessary to negotiate and defend your case. Call 800.669.7782.
#1 Commercial Foreclosure Prevention Attorneys
Mortgage Modification, Debt Solutions, Lender Negotiation
At Katers & Granitz, LLC our expert Commercial Foreclosure Defense Attorneys assist Borrowers, Business Owners, and Commercial Property Owners with all foreclosure-related issues and options, including:
- Deed in Lieu of Foreclosure
- Deficiency Judgment
- Loan Modification
- Loan Reinstatement
- Loan Forbearance
- Loan Term Negotiations
- Loan Covenant Negotiations
- Loss Mitigation
- Value Conservation
- Personal Guarantees
- Repayment and Bring Current Plans
- Settlement Negotiations
- Pre-Negotiation Agreements
- Short sales
- Subordination, non-disturbance, and attornment agreements (SNDA)
- Tenants' rights
- Bankruptcy & Reorganization Strategies
Legal professionals with a strong track record offer the best chance of success in loan modification, lender negotiation, and foreclosure action outcomes. Our experienced Commercial Foreclosure Defense Attorneys assist Borrowers to use what leverage they may possess to achieve a positive outcome.
Unique, Efficient Lender Dispute Solutions
At Katers & Granitz, LLC our extensive experience in commercial foreclosure-related matters offers our clients the most advantageous outcomes in commercial foreclosure cases, both in and out of the courtroom. To learn more about your options, speak with an expert Commercial Foreclosure Defense Lawyer today in a free, confidential consultation: 800.669.7782.