Recharcterization Issues in Participating Loans
John Murray
36 PROBATE& PROPERTY SEPTEMBER/OCTOBER 2005 Andrew O. Alcala A“lead” or “agent” bank often will agree with another bank or financial institution, or several banks or financial institutioons to “participate” the loan, that is, to transfer an interest in a portion of the mortgage loan and the underlyyin debt obligation either before the closing of the loan or after the loan has closed. The lead lender commonly will retain a portion of the loan and be the mortgagee of record, hold the debt...