Payment Subordination: The mezzanine lender holds shares in the property-owning entity. The shares serve as collateral for the mezzanine loan.
Under the mezzanine loan, the borrower may make a payment to the seller in exchange for the right to a share in the property being sold, as long as the payment is not excessive. Non-Recourse: A security feature is non-recourse when a borrower uses it to cover not more than 10 percent of the total loan amount, plus any applicable fees. Lenders will assume non-recourse obligations, and borrowers may use the security feature as collateral. The borrower must be financially competent and in possession of all required documentation to support his claim to be in possession of all required documentation to substantiate his claim. Non-Recourse Debtor: A debtor is a borrower who cannot, after diligent searching, recover title to the property from the defaulting mezzanine borrower. The mezzanine borrower and the mezzanine loan are treated as if the mezzanine borrower is a seller instead of the borrower.
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