As a result, about 40 percent of the income stream, which should have been derived from these apartments, so many attempts without success, HUD decided to foreclose on
the property and set a date for an auction, which would ultimately leave 420 shareholders and their families without any recourse.
The attorney said either the building will come up with the money or the bank will foreclose on
"Lower interest rates on floating loans have helped to slow the need to restructure or foreclose on
troubled properties," says Patrick Leardo, director of Coopers & Lybrand's Real Estate Restructuring and Bankruptcy Services Group.
For example, if an underlying real estate loan were to mature, and as a result of the current real estate market the lender chose not to foreclose, but rather to collect interest from the interest guarantor while waiting for the market value of the mortgaged property to improve, the guarantor may raise a defense that the lender must promptly foreclose on the mortgaged property, or foreclose on such property prior to seeking payment under the guaranty.
In fact, in a recent case, the Federal Deposit Insurance Corporation was able to defeat a claim by two guarantors that it had breached the duty of good faith and fair dealing by its failure to promptly foreclose on property securing the underlying debt.
The co-op itself has remedies, Lubell noted, and it can foreclose on