Sure- on the offer of intelligent conversation, but purely by the nature of this board, more than 3/4 are speculation, and yet I see you only reply to my thread comments on anti trump posts.
If you have a problem with amortization schedules vs. a Line of credit, (your choice- not mine), why would you instantly say infer that these are not term loans and open ended LOC's since you are the one bringing them up- perhaps you can cite a source for your LOC Theory.
My comments are based in experience on banking, lending, and knowing that there are a variety of loan types; some are closed ended- some are open ended, all are originated, and some are sold, and have a quantitative value vs. this arbitrary comments about them having none except the banks consideration of the value, vs. the borrowers input.
You've challenged me that only the appraisal is of importance, and everything else is bullshit- IE. a loan committee would laugh you out of the office, but I seriously doubt that.
I would ask you why do we have applications and disclosures on them if that's the case? Who is being protected? Only the borrower; only the lender? the Banking system, FDIC, PMI, subrogated partnerships on the loans?...in the world you are suggesting, any value is ok as long as a bank appraises it for that value.
I'm saying there are lots of other things that go into it, and in fact, you've completely forgone the grading of loans on hand as assets and failed to address those who are sold at discount for being below standard. So yeah- to get back to the topic- start talking about the false statements vs. your version of what counts vs. what doesn't.
Are false statements even relevant to banking? If not why?
Why does a bank have a disclosure on any application to the fact that you are providing truthful information ?
example:
"I do hereby attest that this information is true, accurate and complete to the best of my knowledge and I understand that any falsification, omission, or concealment of material fact may subject me to administrative, civil, or criminal liability"
btw- when it comes time to value a trump loan, here's some good intel- somewhat dated but still relevant for this discussion.
https://www.foxbusiness.com/politics...a-possible-100
The Trump Organization’s Business Credit Score
According to Nav, The Trump Organization, Inc.’s business credit score is a 19 out of 100 as of Sept. 23, 2016, which puts it below the national average score by more than 30 points. The Nav report said the score indicates the Trump Organization “is very likely to default on its credit payments” and that “this will make it difficult to get financing.” It puts Trump’s Organization in a “medium-to-high risk” category.
more recently:
The outlook on Trump’s 40 Wall Street is looking worse for wear after Fitch Ratings downgraded a portion of a security tied to the Financial District office building.
Fitch downgraded the portion from investment-grade BBB- to BB, a junk credit rating, Crain’s reported. The ratings agency pointed to “performance concerns” when casting a more negative pall over the security, which is also tied to three additional properties.
Mazars:
“While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate,” Mazars General Counsel William J. Kelly wrote to his Trump Organization counterpart, Alan Garten.
Perhaps it was the shitty investments that have been part of the reason for a lawsuit from NY AG' James: — 40 Wall Street, Trump’s Chicago hotel, the Old Post Office-turned-hotel and Trump’s golf course in Doral, Fla. — each lost banks tens of millions of dollars in interest across nearly a decade, according to assessments.
AND since Trump owns about 250 (give or take) businesses, under different names and entities, the piecing together of all the different accountings would be a difficult case for most AGs let alone proving that the guy has been lying - all along. But that's what was done. And as far as Trumps defense- everybody got paid, everyone was flush. Maybe in principal, but we'll not know for certain if those loans were on the brink of default, or worse, cause no bank is going to disclose that publicly. But one could guess!!
Spank away Originally Posted by eyecu2
“But one could guess!”
Yeah, that’s your favorite pastime - guessing. Especially when it comes to Trump. If Tish James cared to know whether Deutsche Bank or other lenders put any Trump loans on their internal Watch List or downgraded them to OAEM status, all she had to do is ask. No need to guess.
I don’t understand why you keep mentioning that banks will often syndicate and sell off loans to other institutions. Whether a bank keeps a souring loan on its books or sells it at a loss is irrelevant - it doesn’t make your point any stronger. Seems like you’re just trying to show off your insider knowledge of the banking industry.
Your NAV business credit score is interesting, if somewhat dated (from your favorite source of reliable news - FOX). Thanks for doing some research for a change. I am not familiar with NAV but it sounds like their credit score is more akin to a BBB rating than a Moody’s or S&P rating. More than half of the NAV score is determined by what vendors & suppliers report on late payments. It’s no big surprise that Trump entities are slow payers of vendor bills. But that doesn’t mean they failed to pay their bank lenders (the ones Tish James claims were “defrauded”) on time and in full.
You keep bringing up some generic loan application disclosure statement you say Trump signed off on. The actual document involved in this case is Trump’s Statement of Financial Condition (SFC). Why don’t we focus on that?
Here is what was actually stated in Trump’s SFC under the section entitled “Basis of Presentation”:
“Assets are stated at their estimated current values and liabilities at their estimated current amounts using various valuation methods. Such valuation methods include, but are not limited to, the use of appraisals, capitalization of anticipated earnings, recent sales and offers, and estimates of current values as determined by Mr.Trump in conjunction with his associates and, in some instances, outside professionals. Considerable judgment is necessary to interpret market data and develop the related estimates of current value. Accordingly, the estimates presented herein are not necessarily indicative of the amount that could be realized upon the disposition of the assets or payment of the related liabilities. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated current value amounts.”
In other words - here’s a list of all my assets and liabilities, now if any of this is important to you, then do your own fucking homework and estimate what YOU think they’re worth using whatever methodologies YOU prefer. Judge Kangaroo doltishly dismissed the statement by saying it “does not rise to the level of an enforceable disclaimer” - even though every banker who reads it knows exactly what it means.
The one statement you made that is 100% correct is - “there are a variety of loan types”.
Consider this - large commercial real estate deals often involve MULTIPLE layers of debt - e.g., senior secured, junior subordinated, mezzanine, and a junk piece. They each have different levels of risk, different credit ratings, and different interest rates, even though they are each extended to the same borrower for the same project. Think about that. Now do you see why I wince whenever I read dumb sweeping generalizations such as “All Trump loans are likely some of the lowest quality”? Various loans made for the same borrower against the same property can be rated anywhere from junk to top investment-grade!
Do you know the difference between recourse versus non-recourse loans? It's quite important in real estate. For any loans that are made on a non-recourse basis, Trump’s Statement of Financial Condition is largely irrelevant since the lender has no recourse to other Trump properties/assets in the event of default. The SFC is only relevant if Trump signs a personal guaranty for the loan. Trump used to do that back in the ‘80s, but my understanding is he stopped doing it (or else did it much more infrequently) after he experienced financial problems during the recession of the early ‘90s.
This doesn’t mean banks won’t ask to see an SFC when they are reviewing a non-recourse loan request. It all falls under the maxim - know your borrower, even if you don’t have a legal claim on everything he owns.
You mention how LTV is important in pricing loans. The reality, as Kevin O’Leary emphasized, is that every borrower will tell his lender a property is worth as much as possible, and every lender will respond “yeah, yeah, sure - we’ll take our own look and then tell you how much we’re comfortable lending at what interest rate.” The borrower can scream until he is blue in the face that a property is worth $100 million, but if the bank is only willing to lend up to $50 million against it on a non-recourse basis, that’s all he’ll get, and it doesn’t matter what he imagines the FMV to be.
Spank, spank, spank... I have to stop now, my hand hurts.
