[SK in CV]

???

[quote=Kingside][quote=investor]Putting morality aside, most commercial loans are non-recourse and have been for many years. .[/quote]

?

Most commercial loans, certainly most real estate commercial loans that involve LLCs/Corporate entities, are personally guaranteed by the principal(s). In California, those personal guarantees are very much recourse, even after the lender forecloses non-judicially and credit bids to get a deficiency.

And the lenders do sue on them.[/quote]

“Most” might be a stretch. I’ve rarely seen a true “personal guarantee” on a secured loan. The security is typically the guarantee. Corporations and LLC’s buy (and finance) property all the time and the maker of the note is the entity itself, with either the managing member of the LLC or an appropriate corporate officer signing on behalf of the entity. Less common on smaller properties, but very common on larger properties. I have seen addendums where the signor also signs as an idividual, though that has little bearing in a non-judicial foreclosure.

The only time I have ever seen a claim for a deficiency after a non-judicial foreclosure on commercial property is by a junior lien holder, when the non-judicial foreclosure was by a senior lien holder. I’m unaware of any exemption to California’s one-action rule that applies to commercial property. It might exist. Can you cite that exemption?

[SK in CV]

???

[quote=Kingside][quote=investor]Putting morality aside, most commercial loans are non-recourse and have been for many years. .[/quote]

?

Most commercial loans, certainly most real estate commercial loans that involve LLCs/Corporate entities, are personally guaranteed by the principal(s). In California, those personal guarantees are very much recourse, even after the lender forecloses non-judicially and credit bids to get a deficiency.

And the lenders do sue on them.[/quote]

“Most” might be a stretch. I’ve rarely seen a true “personal guarantee” on a secured loan. The security is typically the guarantee. Corporations and LLC’s buy (and finance) property all the time and the maker of the note is the entity itself, with either the managing member of the LLC or an appropriate corporate officer signing on behalf of the entity. Less common on smaller properties, but very common on larger properties. I have seen addendums where the signor also signs as an idividual, though that has little bearing in a non-judicial foreclosure.

The only time I have ever seen a claim for a deficiency after a non-judicial foreclosure on commercial property is by a junior lien holder, when the non-judicial foreclosure was by a senior lien holder. I’m unaware of any exemption to California’s one-action rule that applies to commercial property. It might exist. Can you cite that exemption?

[SK in CV]

???

[quote=Kingside][quote=investor]Putting morality aside, most commercial loans are non-recourse and have been for many years. .[/quote]

?

Most commercial loans, certainly most real estate commercial loans that involve LLCs/Corporate entities, are personally guaranteed by the principal(s). In California, those personal guarantees are very much recourse, even after the lender forecloses non-judicially and credit bids to get a deficiency.

And the lenders do sue on them.[/quote]

“Most” might be a stretch. I’ve rarely seen a true “personal guarantee” on a secured loan. The security is typically the guarantee. Corporations and LLC’s buy (and finance) property all the time and the maker of the note is the entity itself, with either the managing member of the LLC or an appropriate corporate officer signing on behalf of the entity. Less common on smaller properties, but very common on larger properties. I have seen addendums where the signor also signs as an idividual, though that has little bearing in a non-judicial foreclosure.

The only time I have ever seen a claim for a deficiency after a non-judicial foreclosure on commercial property is by a junior lien holder, when the non-judicial foreclosure was by a senior lien holder. I’m unaware of any exemption to California’s one-action rule that applies to commercial property. It might exist. Can you cite that exemption?

[SK in CV]

???

[quote=Kingside][quote=investor]Putting morality aside, most commercial loans are non-recourse and have been for many years. .[/quote]

?

Most commercial loans, certainly most real estate commercial loans that involve LLCs/Corporate entities, are personally guaranteed by the principal(s). In California, those personal guarantees are very much recourse, even after the lender forecloses non-judicially and credit bids to get a deficiency.

And the lenders do sue on them.[/quote]

“Most” might be a stretch. I’ve rarely seen a true “personal guarantee” on a secured loan. The security is typically the guarantee. Corporations and LLC’s buy (and finance) property all the time and the maker of the note is the entity itself, with either the managing member of the LLC or an appropriate corporate officer signing on behalf of the entity. Less common on smaller properties, but very common on larger properties. I have seen addendums where the signor also signs as an idividual, though that has little bearing in a non-judicial foreclosure.

The only time I have ever seen a claim for a deficiency after a non-judicial foreclosure on commercial property is by a junior lien holder, when the non-judicial foreclosure was by a senior lien holder. I’m unaware of any exemption to California’s one-action rule that applies to commercial property. It might exist. Can you cite that exemption?

[SK in CV]

[quote=jficquette]The dead beat government of ours is in worse shape then Commercial Debtors.[/quote]

Has the government defaulted on its debt and I missed the news?

[SK in CV]

[quote=jficquette]The dead beat government of ours is in worse shape then Commercial Debtors.[/quote]

Has the government defaulted on its debt and I missed the news?

[SK in CV]

[quote=jficquette]The dead beat government of ours is in worse shape then Commercial Debtors.[/quote]

Has the government defaulted on its debt and I missed the news?

[SK in CV]

[quote=jficquette]The dead beat government of ours is in worse shape then Commercial Debtors.[/quote]

Has the government defaulted on its debt and I missed the news?

[SK in CV]

[quote=jficquette]The dead beat government of ours is in worse shape then Commercial Debtors.[/quote]

Has the government defaulted on its debt and I missed the news?

[SK in CV]

[quote=bearishgurl]This is a very commonplace practice.[/quote]

That’s pretty much what I was saying. Trusts don’t borrow money.

[SK in CV]

[quote=bearishgurl]This is a very commonplace practice.[/quote]

That’s pretty much what I was saying. Trusts don’t borrow money.

[SK in CV]

[quote=bearishgurl]This is a very commonplace practice.[/quote]

That’s pretty much what I was saying. Trusts don’t borrow money.

[SK in CV]

[quote=bearishgurl]This is a very commonplace practice.[/quote]

That’s pretty much what I was saying. Trusts don’t borrow money.

[SK in CV]

[quote=bearishgurl]This is a very commonplace practice.[/quote]

That’s pretty much what I was saying. Trusts don’t borrow money.

[SK in CV]

[quote=bearishgurl]

In a personal trust, any equity or “cash-out” refi taken out would be legally classified as “recourse” paper, the same as for an individual or joint tenancy. The trustees are free at any time to use one trustee’s individual income to qualify for a loan, or their collective incomes. However, it would take ALL the trustees’ signatures on the trust deed and note to apply for a loan against the property, regardless of whose income/assets are used to qualify.[/quote]

Not sure what a “personal trust” is, though technically, yeah, that’s probably all accurate. But as a practical matter, lenders don’t lend to trusts, except in very rare situations. Almost invariably, (even moreso with run-of-the-mill living trusts) the lender will insist title is held by individuals, not trusts, and the borrower are individuals, not trusts. So title is transferred out of a trust, into the name of the grantor, the loan is recorded, and then the property is transferred back into the trust.

Something to do with the near impossibility of successfully bringing collection actions against trusts. I only mention it here because these particular borrowers could be the exception. You gotta know someone or have some special influence for lenders to allow it. (I’m pretty sure that it’s not allowed for conforming loans.)

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