Loan-to-own: Predatory or practical?
From the January issue: The collapse of the commercial real estate market in New York has sparked a phenomenon that is being widely debated in legal and financial circles: Is loan-to-own an act of bad faith or simply a smart business move? Lenders are increasingly willing to foreclose on defaulted loans for office towers, malls and multifamily high-rises. But some developers are crying foul over what they say are "pretextual" defaults, created by a lender to help third-party investors snap up distressed assets on the cheap. These battles -- which center on whether lenders are unfairly colluding with third-party investors on loan sales -- have begun to play out in the courts, including two of the most high-profile cases, involving 3 Columbus Circle and 510 Madison Avenue. [more]