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Florida Banking Law Blog Legal developments impacting banking, finance and loan enforcement in Florida

Tag Archives: Commercial Lending


Posted in Bankruptcy

As mentioned in previous posts, filing an involuntary bankruptcy petition could subject a petitioning creditor to extensive attorneys’ fees and costs. In the final installment of the “Involuntary Bankruptcy 101” series, this post reviews a recent Eleventh Circuit decision posing major pitfalls for creditors hoping to collect on their debts. Section 303(i)(1) of the Bankruptcy… Continue Reading

Correcting a Legal Description after Final Judgment of Foreclosure and Sale

Posted in Commercial Lending, Commercial Real Estate Lending, Residential Foreclosure, Residential Real Estate Lending

Including an accurate legal description (known as the “legal”) in a mortgage is of utmost importance to lenders; in the event of foreclosure, a purchaser (often the lender) cannot obtain clear title to the property unless it obtains a deed where the legal matches the property actually held by the original mortgagor prior to the… Continue Reading

Marriage Equality and The Equal Credit Opportunity Act

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Dischargeability of Debts, Residential Foreclosure, Residential Real Estate Lending, Special Assets Litigation

On January 1, 2015, United States District Judge Hinkle issued an Order  ruling that all Florida counties are to start issuing marriage licenses to same-sex couples as of January 6, 2015. The implications of this ruling are significant for same-sex couples, and their creditors as well. There are various legal aspects to consider as Florida law… Continue Reading

Documentary Stamp Taxes: Enforcing a Promissory Note and Mortgage Prior to Payment

Posted in Commercial Lending, Commercial Real Estate Lending, Dischargeability of Debts, Residential Real Estate Lending

While failure to pay Florida’s documentary stamp taxes on a promissory note or mortgage can subject the offender to criminal and financial sanctions, the state’s courts of appeal are split when it comes to determining whether Florida law permits enforcement of a note or mortgage when those taxes remain unpaid.  The split centers on language… Continue Reading

Operation Choke Point

Posted in Banking Operations, Commercial Lending, FDIC Related Issues

As part of a coordinated, multi-agency initiative known as “Operation Choke Point,” the Federal Deposit Insurance Corporation (FDIC) has warned financial institutions that they might be liable for maintaining banking relationships with certain “high risk” businesses and customers.  Specifically, the FDIC expressed concern about relationships between banks and payment processors who use their deposit accounts… Continue Reading

Spouse-Guarantor Rule: A Split Between Federal Circuit Courts

Posted in Commercial Lending, Commercial Real Estate Lending

When a closely-held entity applies for a loan, the financial institution usually requires the entity’s owner(s) to guaranty the loan.  If the owner is married, the financial institution may also require the owner(s) spouse(s) to guaranty to improve the likelihood that loan will be repaid if the borrower defaults.  This seems like a logical credit… Continue Reading

Eleventh Circuit Concludes That Filing a Proof of Claim After the Expiration of Statute of Limitations On the Ability to Collect a Debt Violates the FDCPA

Posted in Bankruptcy, Commercial Lending

Recently, the Eleventh Circuit Court of Appeals (the “Court”) ruled whether filing a proof of claim in a chapter 13 bankruptcy case after the statute of limitations on the ability to collect the debt expires violates the FDCPA.  In Crawford v. LVNV Funding, LLC, et. al., Debtor was indebted to a furniture company.  A third-party… Continue Reading

Diligence in Hotel Lending

Posted in Commercial Lending

The hotel industry appears to be on an uptick, which is good news for lenders.  Hotel construction in May 2014 is up over 13% from the same time period in 2013.  Moreover, record high occupancy rates and low supply could continue to drive an influx of new rooms into 2015 and beyond.  As more lenders are… Continue Reading

Eleventh Circuit Rules Post-Confirmation Settlement Proceeds are Property of Chapter 13 Estate

Posted in Bankruptcy, Commercial Lending

A recent case out of the Eleventh Circuit Court of Appeals (the “Court”) concluded that proceeds stemming from a post-confirmation settlement agreement between a chapter 13 debtor and its mortgagor related to a violation of the automatic stay become property of the bankruptcy estate.  In Crouser v. BAC Home Loans Servicing, LP (In re Crouser),… Continue Reading

The Business Records Exception to the Hearsay Rule

Posted in Banking Operations, Residential Foreclosure

When a bank assigns a mortgage to another bank, the assignor typically provides a loan payment history to the assignee as part of the transfer. If the assignee later brings suit to foreclose the mortgage, it is typical to seek foreclosure via a Motion for Summary Judgment.  In support of such a motion, we include… Continue Reading

Guarantors Remain Liable Under Renewed Promissory Note, Even Absent Notice or Consent, Where the Modifications Are Not Adverse To the Guarantors’ Interests

Posted in Commercial Lending, Commercial Real Estate Lending

In a prior post, we discussed a grantor’s continuing liability under a promissory note that is renewed without his notice or consent where the guaranty is a continuing guaranty, meaning it contemplates revisions or extensions of time.  In this post, we discuss the additional argument that a guarantor remains liable for a renewed promissory note,… Continue Reading

“Substantial Compliance” With Notice Requirements Not Enough

Posted in Banking Operations, Commercial Lending, Residential Foreclosure

Florida’s Fifth District Court of Appeal recently emphasized the need for lenders to strictly comply with the notice requirements of a mortgage prior to foreclosure. In Samaroo v. Wells Fargo, the borrower appealed the circuit court’s entry of a summary final judgment of mortgage foreclosure. Finding that the bank failed to strictly comply with all… Continue Reading

Eleventh Circuit Holds Replacement Value – Applies to Surrender of Collateral in Chapter 13 Plan

Posted in Bankruptcy, Commercial Lending

On March 27, 2014, the Eleventh Circuit (the “Court”) issued a ruling, which will have a major impact on how Chapter 7 and 13 debtors are able to treat claims of secured creditors. The issue in In re Brown, 13-13013, 2014 WL 1245266 (11th Cir. 2014) was whether §506(a)(2)’s valuation standard, which requires use of… Continue Reading

Recent Decision Caps Secured Creditor’s Credit Bid in §363 Sale to Purchase Price of Acquired Debt

Posted in Bankruptcy, Commercial Lending

It is well-settled that secured creditors are ordinarily entitled to credit bid their allowed secured claim in a sale pursuant to § 363 of the Bankruptcy Code (the “Code”). In Radlax Gateway Hotel, LLC v. Amalgamated Bank, 132 S.Ct. 205 (2012), the Supreme Court acknowledged that bankruptcy courts have the power to prohibit a secured… Continue Reading

The Absolute Priority Rule in Individual Chapter 11 Bankruptcy Cases lives on … for now

Posted in Bankruptcy, Commercial Lending

The principle behind the absolute priority rule is simple: unsecured creditors should be paid before the debtor is entitled to retain property of the bankruptcy estate. In a corporate setting the absolute priority rule operates to ensure that an unsecured creditor is paid in full before a shareholder is able to retain its ownership interest… Continue Reading

Standing qua Mortgagee: Challenging the Assignment of a Mortgage in Federal Court

Posted in Commercial Lending

Mortgages are big business. When mortgages are assigned, however, the mortgagor often is a non-party to the assignment. Thus, within certain jurisdictions, mortgagors have historically lacked the requisite standing to challenge the validity of the assignment. Recently the First Circuit handed down the decision of Culhane v. Aurora Loan Services of Nebraska, in which they… Continue Reading

Georgia Non-Judicial Power of Sale Foreclosure – Overview of Procedures

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Residential Foreclosure, Residential Real Estate Lending

Given our geographic proximity, it is not uncommon for Florida banks to do business in Georgia or with clients owning property in Georgia. This geographic proximity, however, does not lend itself to equivalence of foreclosure procedures. This is because, unlike Florida, Georgia recognizes non-judicial foreclosures. Indeed, power of sale foreclosures, as they are called, are… Continue Reading

When the FDCPA and the Bankruptcy Code Conflict: Which Controls?

Posted in Bankruptcy, Commercial Lending, Debt and Judgment Collection

As most lenders and banking litigators understand, courts construe the language of the Fair Debt Collection Protection Act (FDCPA) very broadly. As we have discussed in previous posts, an initial communication to collect a debt must contain specific language that “the debt collector is attempting to collect a debt and that any information obtained will… Continue Reading

The Shell Game: Bankrupt Debtor’s Concealment of Pre-Petition Claims

Posted in Bankruptcy, Debt and Judgment Collection

Part I:  The Setup:  Treatment of Prepetition Causes of Action in Bankruptcy Proceedings In commercial lending, as in law, no single practice area exists independently of another. Bankruptcy law often intersects with contract law and even personal injury law when debtors find themselves as the plaintiff or defendant in a prepetition civil action. It is… Continue Reading

Enforcing a Lost Promissory Note

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Dischargeability of Debts, Loan Sales and Syndications, Residential Foreclosure, Residential Real Estate Lending, Special Assets Litigation

In Florida, it is well established that the original promissory note must be surrendered to the court as a condition of its enforcement. What do you do when you cannot find the original promissory note? Florida Statutes 673.3091 sets out a procedure to follow in order to  “reestablish” a lost note and provides that a… Continue Reading

Caveat Creditor: Courts Split Regarding Abrogation of Absolute Priority Rule for Individual Chapter 11 Debtors

Posted in Bankruptcy, Commercial Lending, Debt and Judgment Collection

Although the 2005 BAPCPA amendments appeared to be a boon for creditors, at least with respect to Chapter 7 claims, individual Chapter 11 debtors immediately seized upon a perceived ambiguity in Congress’ language with regards to cramdown, which may ultimately prove costly for creditors. Generally, a plan of reorganization can be confirmed in one of… Continue Reading