Posted by: BayAreaComRE | November 30, 2009

Choosing a Receiver 101

Although the post is a little self-serving, this interview with Bill Hoffman of Trigild via Globe Street sheds a decent amount of light on how saturated the receiver business has become in this cycle and what criteria lenders/servicers should use when choosing a receiver.

Some memorable excerpts include:

“Some experts estimate that as many as 500 hotels in California are already in default, but awaiting action from lenders and servicers, who are already swamped with other product types.”

“Loans on properties whose values have already shrunk to less than the current debt are not viable candidates for re-financing, especially in this current dry well of financing.”

“Many commercial borrowers are now dealing with special servicers who did not originate the loans, have no relationship with the borrower, and work under very strict guidelines and regulations which limit the options for resolutions.”

“The number of people claiming to be qualified to serve as a receiver has probably increased 1000% just this year.  There are few if any formal requirements for a receiver in many states, and some management companies, etc. will offer to do the receivership work “free” in order to get the management assignment.”
The full post can be found here.

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