Are prospective Note bidders allowed to conduct site inspections on the underlying real properties prior to bidding on Notes?
Ans. No, the current owner (holder) of a Note does not own the real estate that secures the loan. Accordingly, they do not have the right to allow third parties access to underlying property; in fact, confidentiality agreements related to Note purchases are very explicit in prohibiting prospective bidders from contacting borrowers directly or arranging formal site inspections with borrowers or borrowers’ representatives. Therefore, prospective Note bidders must limit site inspections to what is available to the general public without legally trespassing.
