May a qualified lender modify a distressed loan notice when it is being sent to a borrower(s) who has filed bankruptcy?
After conferring with its legal counsel, a qualified lender may modify a notice to the extent necessary to remain in compliance with the local bankruptcy court’s automatic stay. Because the Act and bankruptcy laws are read together in these situations, FCA examination staff will give proper consideration to the legal guidance a qualified lender obtained—if this legal guidance is properly documented in a loan file—when reviewing for compliance with distressed loan notice rules.
- Does a borrower have to submit an application for restructuring before meeting with the qualified lender to discuss either the distressed loan notice or the inputs into a restructure plan?
- Does the least-cost analysis have to be completed if the qualified lender knows it will restructure the distressed loan(s)?
- Which distressed loan notice is sent before a qualified lender may act to protect collateral it fears is at risk?