Six Questions for Hogan Lovells’ David Dunn

NEW YORK CITY-“If (or more realistically when) interest rates rise, that could trigger a spate of further commercial loan defaults. On the other hand, the term of many commercial real estate loans is much shorter than residential mortgage loans, so many improvident commercial loans made in mid-decade have come due, or are now coming due.” So says locally based David Dunn, a partner at law firm Hogan Lovells, who represents banks and other financial institutions in contested litigation relating to foreclosures. Dunn recently chatted with GlobeSt.com on current happenings in the CRE foreclosure litigation arena.

GlobeSt.com: I know you represent banks and other financial institutions in contested litigation relating to foreclosure, so I am curious, what is happening in foreclosure litigation in the commercial real estate space these days. Dunn: Foreclosure litigation in the commercial context involves loan structures that are almost always significantly more complex than a standard residential loan. We see commercial foreclosure actions being filed and prosecuted. But, they are much more sui generis, and often involve complex issues of workout, refinancing, sale of underlying notes or interests and may raise complex tax questions. Distressed commercial properties are often foreclosed as part of the effort to rationalize their financing to current values. But those cases are part of broader ongoing efforts to address financing issues for distressed commercial real estate and address structural issues.