[quote=Russell]Adam, Congrats on the merchandizing success so far. Makes me wonder if this activity causes some of your concern about loan mods being a “material fact”. Are you worried that somehow one will cause some sort of hit to you or perhaps cause problems somewhere else in the business, an escrow on a regular sale or something? I am just trying to understand how a market participant is supposed to be hurt by it, other than the fact that mods may affect inventory stream? As you have said, that matters a lot to you now.
You or one of your partners must be working closely with a title company and/or you are pouring over stuff at the county recorder’s office. Wouldn’t these things expose what is happening with recordings related to documentation of loan mods?[/quote]
Russell,
If you agree that “sold” comps are meaningful to current/future buyers, then it’s only reasonable that principal reductions be recorded and used as comps as well.
Why? Because loan mods with principal reductions are de facto sales to the current “owner” **at a new price,** and should be used as current comps.
