GoDocs offers lenders the ability to include Alternative Dispute Resolution (ADR) provisions—such as arbitration and mediation—within their loan documents. These provisions are designed to reduce the cost and time of resolving disputes that may arise during the life of a loan.
However, it’s important to understand how these provisions interact with foreclosure and related enforcement actions.
That said, regardless of whether ADR provisions are included in the loan documents, the lender always retains its right to pursue a judicial and/or non-judicial foreclosure subject to applicable state law judicial procedures.
🔒 Foreclosure and Enforcement Actions Are Excluded from ADR
The ADR provisions that can be added (at the sole election of a lender) in the GoDocs loan documents are not intended to include, and expressly exclude, any actions related to or involved with the execution of foreclosure and other related remedies.
Specifically, the arbitration clause in GoDocs’ ADR provisions states:
"No act to take or dispose of all or any portion of the Mortgaged Property shall constitute a waiver of this arbitration agreement or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code."
Accordingly, any actions that relate to:
- (i) the foreclosure of real or personal property collateral,
- (ii) the appointment of a receiver to control collateral assets,
- (iii) the issuance of a writ of attachment, or
- (iv) the pursuit of Article 9 remedies under the UCC,
are exempt from the ADR provisions that a lender may include in its GoDocs loan documents.
🧭 What This Means for Lenders
Including ADR provisions in your loan documents does not limit your ability to foreclose or pursue other remedies related to collateral enforcement. These actions remain fully available to you outside of the arbitration process.
This structure ensures:
- Enforceability of ADR provisions for general disputes (e.g., breach of contract),
- Preservation of your rights to act swiftly and decisively in the event of a default,
- Clarity for borrowers and courts on what is and isn’t subject to arbitration.
⚖️ What If a Lender Chooses Not to Include ADR?
If a lender does not elect to include ADR provisions, dispute resolution under the loan documents will be subject to traditional legal recourse procedures available under applicable law to resolve disputes such as:
- Breach of contract claims,
- Tort claims,
- Other statutory and common law remedies due to violations of the terms and conditions set forth in the loan documents.
In this case, the lender retains full access to the court system for dispute resolution. ADR is exactly what its name implies—an alternative to these traditional remedies, not a replacement.
As previously noted, regardless of whether ADR provisions are included in the loan documents, the lender always retains its right to pursue a judicial and/or non-judicial foreclosure subject to applicable state law judicial procedures.