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gdcox.
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February 9, 2008 at 3:17 PM #11768February 9, 2008 at 5:40 PM #150500
Bugs
ParticipantMost land loans are written at or below 50% of the value of the property, just to avoid undue exposure from market corrections like this. It can be bad, but unless they were stupid about their underwriting it’s not as bad as it might otherwise appear.
February 9, 2008 at 5:40 PM #150760Bugs
ParticipantMost land loans are written at or below 50% of the value of the property, just to avoid undue exposure from market corrections like this. It can be bad, but unless they were stupid about their underwriting it’s not as bad as it might otherwise appear.
February 9, 2008 at 5:40 PM #150772Bugs
ParticipantMost land loans are written at or below 50% of the value of the property, just to avoid undue exposure from market corrections like this. It can be bad, but unless they were stupid about their underwriting it’s not as bad as it might otherwise appear.
February 9, 2008 at 5:40 PM #150787Bugs
ParticipantMost land loans are written at or below 50% of the value of the property, just to avoid undue exposure from market corrections like this. It can be bad, but unless they were stupid about their underwriting it’s not as bad as it might otherwise appear.
February 9, 2008 at 5:40 PM #150858Bugs
ParticipantMost land loans are written at or below 50% of the value of the property, just to avoid undue exposure from market corrections like this. It can be bad, but unless they were stupid about their underwriting it’s not as bad as it might otherwise appear.
February 9, 2008 at 6:45 PM #150525drunkle
Participantbugs:
what do you think of the probability that land appraisals during the past run up were taken at face value simply due to the “sure thing” that real estate was? ie., everyone was stupid about their underwriting for the past few?
February 9, 2008 at 6:45 PM #150785drunkle
Participantbugs:
what do you think of the probability that land appraisals during the past run up were taken at face value simply due to the “sure thing” that real estate was? ie., everyone was stupid about their underwriting for the past few?
February 9, 2008 at 6:45 PM #150796drunkle
Participantbugs:
what do you think of the probability that land appraisals during the past run up were taken at face value simply due to the “sure thing” that real estate was? ie., everyone was stupid about their underwriting for the past few?
February 9, 2008 at 6:45 PM #150812drunkle
Participantbugs:
what do you think of the probability that land appraisals during the past run up were taken at face value simply due to the “sure thing” that real estate was? ie., everyone was stupid about their underwriting for the past few?
February 9, 2008 at 6:45 PM #150885drunkle
Participantbugs:
what do you think of the probability that land appraisals during the past run up were taken at face value simply due to the “sure thing” that real estate was? ie., everyone was stupid about their underwriting for the past few?
February 9, 2008 at 9:28 PM #150871asragov
ParticipantThere is no need to reprice bank loans that are sitting on the balance sheet, if they are current. That is, even if the land is falling in price, as long as the borrower is making payments, there is no need to mark them down. We generally don’t live in a world where assets (loans, at least) are marked to market.
However, if the borrower defaults, and the bank has to sell the land, it will certainly show a loss if it sells the land for less than the loan.
Bugs is correct – land loans are *typically* very, very conservative. If lenders have been too aggressive on this front, they are going to get seriously slammed.
February 9, 2008 at 9:28 PM #150958asragov
ParticipantThere is no need to reprice bank loans that are sitting on the balance sheet, if they are current. That is, even if the land is falling in price, as long as the borrower is making payments, there is no need to mark them down. We generally don’t live in a world where assets (loans, at least) are marked to market.
However, if the borrower defaults, and the bank has to sell the land, it will certainly show a loss if it sells the land for less than the loan.
Bugs is correct – land loans are *typically* very, very conservative. If lenders have been too aggressive on this front, they are going to get seriously slammed.
February 9, 2008 at 9:28 PM #150887asragov
ParticipantThere is no need to reprice bank loans that are sitting on the balance sheet, if they are current. That is, even if the land is falling in price, as long as the borrower is making payments, there is no need to mark them down. We generally don’t live in a world where assets (loans, at least) are marked to market.
However, if the borrower defaults, and the bank has to sell the land, it will certainly show a loss if it sells the land for less than the loan.
Bugs is correct – land loans are *typically* very, very conservative. If lenders have been too aggressive on this front, they are going to get seriously slammed.
February 9, 2008 at 9:28 PM #150860asragov
ParticipantThere is no need to reprice bank loans that are sitting on the balance sheet, if they are current. That is, even if the land is falling in price, as long as the borrower is making payments, there is no need to mark them down. We generally don’t live in a world where assets (loans, at least) are marked to market.
However, if the borrower defaults, and the bank has to sell the land, it will certainly show a loss if it sells the land for less than the loan.
Bugs is correct – land loans are *typically* very, very conservative. If lenders have been too aggressive on this front, they are going to get seriously slammed.
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