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Forbearance Agreements, Problem Real Estate Loans

Law360 (November 11, 2008, 12:00 AM EST) -- Lenders and their legal counsel confronted with nonperforming or distressed real estate loans must make decisions regarding when to commence foreclosure or other legal remedies. Delay in pursuing remedies can be costly, especially in a declining real estate market.

The lender may be able to improve its position, however, through the use of a well-crafted forbearance agreement, in which the lender agrees to not take legal action it is otherwise entitled to take against the borrower for a limited time period in exchange for the borrower’s...
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