It’s a bad day for the loan officer who forecloses on a loan and unwittingly assumes major environmental liability. Some environmental issues have such a great impact on the property’s value and risk profile that a decision not to foreclose is simple. Consider a dry cleaner with significant groundwater contamination that could migrate under a residential neighborhood: The risk of private tort liability may be too much for the lender to shoulder.
But most properties present less obvious issues. With some careful attention to environmental details, astute lawyers can help lenders avoid potential environmental regulatory headaches during and after foreclosure.
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