[quote=analyst]The typical situation would be that the new terms do not include a principle reduction. Usually some amount of principle is set to an interest rate of zero and a payment rate of zero, but is still due, hopefully to be collected in the future after values rise again.
The lender will now collect a substantial payment instead of zero. The gutted mark-to-market rules allow the lender to avoid writing down the asset value and capital value.[/quote]
I’m with analyst. That 200k was just set aside by the lender, not completely forgiven.
