You know what winning a foreclosure gets you? A deed. You know what it doesnt get you? The keys, the rent roll, or the rent. “Get out of the damn property. Stop taking money that doesnt belong to you.” A federal magistrate judge in Houston said that in May. He was talking to the owner of a 228-unit apartment complex in Lake Jackson, Texas. Freddie Mac had already foreclosed on it. According to Freddie Mac, the owner, an LLC tied to New York-based Nord Group, stopped paying the mortgage in November 2024 and kept collecting more than $200,000 a month in rent. It sued the lender. It filed bankruptcy. After the foreclosure sale, Freddie Mac says it refused to leave and kept taking the rent. Its lawyer argued that foreclosure alone doesnt give the lender possession, and that Texas law makes the new owner file an eviction suit first. Texas is supposed to be the easy state. Eleven properties, about $386 million of mostly government-backed debt, and every ownership LLC has filed Chapter 11 since 2024. One propertys bankruptcy has moved through courts in New York, Texas, and Delaware. Seven of the 11 were foreclosed this year. Nord still holds four. When a court-appointed receiver took over five Houston properties, the receiver says the old management locked the computers within minutes so that the new team couldnt see the rent roll. Fannie Mae had insurance certificates on file whose policy numbers didnt match the properties. Nord denies the allegations. We usually talk about extend-and-pretend as a bet on rates. Give the borrower a year, rates fall, somebody refinances, and the lender never books the loss. Rates are part of it. This case shows what a lender can face when it moves to take the building back instead: bankruptcy filings, lawsuits against the lender, and a receiver locked out of the software while the building gets worse. Recourse doesn’t fix it either. Carve-out guarantees commonly make the guarantor personally liable for the full debt if the borrower voluntarily files bankruptcy, and courts have enforced them. But a guaranty is only worth what the guarantor can pay. On a recorded call shared with Bisnow, Nords CEO said the lenders would eventually win a judgment. Between you and me, theyre never going to get their money. He denies the call happened. One investor sued, settled, sued again, and won. He’s still out about $400,000. A lender can win the foreclosure, the bankruptcy dismissal and the judgment, and still not get the keys, rent roll, or rents! Remember that the next time you wonder why a lender signed another extension. https://lnkd.in/eqzxjPp4