Banks & Financial Institutions

Indianapolis Banking Attorneys & Financial Institution Lawyers

We routinely counsel, advise and represent banks, credit unions, finance companies and other financial institutions on a broad range of topics, from documenting loans to workouts, replevins, foreclosures, and the sale of other real estate owned (“OREO”) property.

Our representation is focused on providing pragmatic, goal-focused strategies. We are devoted to developing efficiencies in our practice and client interaction. We approach each problem seeking to solve it faster and cheaper than the last one.  Meeting these goals means helping our clients achieve higher collections, decreased collection times, and lower legal fees.  Our clients enjoy our assistance not only with resolving the problems at hand, but also on identifying opportunities for improvement in their practices and procedures to increase their protection, maximize certainty, and minimize risk.

Specific Banking Areas

We routinely assist clients with matters including:

  • Preparing or reviewing loan documentation (including notes, security instruments and cross-collateralization agreements) and perfecting interests in collateral
  • Loan reviews and workouts, from negotiation, structuring, drafting and enforcement of forbearance agreements, deeds in-lieu of foreclosure, short sales, and other out-of-court resolutions
  • All aspects of foreclosure (including judicial enforcement, sheriff sales, REOs, receiverships and bankruptcy proceedings)
  • Collections, including the obtaining and pursuing of recovery on deficiency judgments
  • Providing advice on regulations and laws governing banks and other financial institutions, particularly such laws and regulations that concern commercial and consumer lending, as well as compliance with money laundering and other laws

Frequently Asked Questions

How do I best cross-collateralize loans?

Cross-collateralization occurs when either: (i) using the same asset(s) to secure one or more loans made to the same party; or (ii) using the same asset(s) to secure one loan made to one party and another loan made to a second party. In either situation, the loans may be cross-collateralized in one of two ways. First, loans may be directly cross-collateralized by including language in the security agreement (or mortgage) that indicates the asset(s) “secures the two-loan made to a party” or that the asset(s) “secures all debts of party one and party two.”

Alternatively, loans may be cross-collateralized indirectly by including language in the security agreement that indicates the asset(s) “secures all obligations to the lender.” If there is one borrower, this would secure all of their obligations. If there are two borrowers, you would need each borrower to guarantee the debts of the other borrower. By doing so, you create an “obligation” for that borrower and therefore such obligation is secured.

Should I have a separate security agreement?

Although security agreements may be part of the promissory note, it is usually a best practice to have a security agreement that is separate from the promissory note because to include all the terms needed to properly protect the secured creditor in the note may make the note cumbersome.

Should I have co-borrowers or guarantors?

While it largely depends on the type of transactions, there is a potential risk inherent with the use of co-borrowers. A co-borrower may later be deemed to be an accommodation party and therefore given common law defenses of a guarantor. However, these common law defenses are normally expressly waived in the language of a well-drafted guaranty. This risk can also be limited by including proper waiver language within the body of the promissory note.

What should be in a forbearance agreement?

A well-drafted forbearance agreement will almost always: (i) be signed by all parties (including guarantors or pledgors of collateral); (ii) reference the amount of debt and describe the obligations and collateral; and, (iii) describe the default and the specific things the lender and borrower have agreed to do (or not do) during the forbearance period.  Perhaps just as importantly, the forbearance agreement should also: (i) clean up any defects in the original documentation; (ii) contain express waivers of all defenses to the obligations or claims the borrower may have against the lender; and, (iii) in the case of commercial real estate collateral, contain provisions for the appointment of a receiver and waiver of the right of redemption upon default under the terms of the forbearance.  

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