I just read the Norris Group (see above) ebook, and a startling realization at the very end of it, is that the loan to value ratio (LTV) is based on appraised values. The authors go to lengths to explain (including on their video) that this provides enough skin in the game, for lender peace of mind. That seems like very little skin in the game to me, relying too much on realizing your capital in the event of default, as opposed to financial pressure on the borrower to follow through. I wonder if this is typical? Just my tuppence.
