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Debt Mods on Receiverships Now Rare

TUSTIN, CA-In an UPDATE to this morning's story, Coreland Cos.' principal Pat Galentine tells GlobeSt.com that today's low-interest environment makes debt modifications scarce.

By Carrie Rossenfeld | Updated on March 05, 2013

TUSTIN, CA-While receivership properties can and do sell, as GlobeSt.com reported on earlier today, lenders who are hoping that debt will be modified and assumed by buyers once the properties are in receivership are having their hopes dashed by the reality of the lending climate. Pat Galentine, a principal with Coreland Cos. and a State Court-appointed receiver, tells GlobeSt.com that many lenders had thought putting distressed properties into receivership would enable the debt to be modified and handled by future buyers, but with the current low-interest-rate environment, this hasn’t become a growing trend.

“I’ve only done one receivership sale where the debt was actually modified,” Galentine says. “Most are finding that it’s too long and cumbersome a process and doesn’t make sense.”

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