In the period immediately following a default by a borrower, a
mortgage lender is often faced with a number of strategic issues to
consider. The lender must quickly determine, among other things,
the underlying cause(s) of the default, whether the borrower is in
a position and prepared to deal with the problem, the rights and
remedies available to the lender, and how quickly and aggressively
the lender should proceed with the exercise of one or more of its
remedies.
In addition to the other remedies which a mortgage lender has in
its arsenal, such as power of sale, foreclosure, receivership,
taking possession and suing the borrower on its promise to pay the
debt (which remedies will be discussed in future articles), a
lender holding an assignment of rents as additional security to the
mortgage may consider "scooping" the rents by diverting
the rental payments generated by the borrower's tenants to the
lender in order to exercise control over the borrower's
