In the last several months, our country has seen unprecedented changes in the economy and staggering unemployment rates due to business shutdowns across several sectors. Consequently, many lenders are working with businesses to keep them operational including payroll protection loans and providing payment relief options such as forbearance. Based on the estimated volume of loans with some type of modification, the time will soon come when payment relief and loan accommodations will come to a halt and distressed assets will be in danger of foreclosure.
When the foreclosure process begins and reality sets in that a distressed asset may soon become a bank-owned asset, the due diligence process begins to look a bit different. In addition to the headache of dealing with a failed loan, having to deal with the property itself and becoming an owner of that property can prove an even bigger headache. Performing thorough due diligence at the pre-foreclosure stage is critical. In fact, the due diligence a lender completes at this stage should go above and beyond what was completed during the origination of the loan. What should this enhanced due diligence look like? The following GlobeSt.com article discusses what going above beyond looks like during the pre-foreclosure process.