May a qualified lender include potential recovery from a guarantor in the least-cost analysis?
Yes. The potential recovery from the guarantor(s) may be a restructure cost criterion because the use of guarantors typically provides financial strength to the borrower’s restructuring application. Similarly, the potential recovery from guarantors may be included in the foreclosure cost criteria as a mitigation of liquidation values and/or as part of the overall liquidation costs (that is, the cost of collecting from guarantor(s)).
