Demystifying The Out-Of-Court Foreclosure Process

Introduction

Mezzanine lenders looking to foreclose on their collateral have the advantage of being able to pursue remedies outside of court. But the process, which is described in the Uniform Commercial Code (UCC), is often ill understood and can seem daunting. In this article, we aim to simplify the process, explain the roles of lawyers and other professionals, and highlight some common strategies and pitfalls.

What are Mezzanine Loans

It's helpful to generally understand the types of loans typically subject to a UCC foreclosure. Generally, these are loans that are secured by assets that are not direct interests in real estate, including equity interests such as stock, shares or units in a limited liability company.