There has been a lot of change in market sentiment in the first half of 2025.

After a little more than two years and 525 basis points-worth of rate hikes, the Federal Reserve has started to signal that rate cuts are on the horizon.

As loan-related asset quality problems occurred during the 2008 financial crisis, many institutions were left in a less-than-desirable liquidity position.

Well . . . at least not in real time.

When facing a loan default, the fundamental question for lenders is whether to exercise their remedies against the borrower and/or guarantors (collectively, “obligors”) or to pursue a settlement (workout).