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First, you speculate (based on your 10 years of banking experience, cough cough) that Trump was fraudulently able to obtain real estate loans over 150% LTV. ($2 mln against a property worth $1.3 mln.)
Then you tell us most banks will only lend up to 70-85% LTV on commercial properties.
All I can say is - man, that trumpy sure must be a crafty one to snooker banks into busting through their own lending limits like that!
And apparently the banking regulators never caught any of this loosy-goosy stuff either!
So I worked in banking for 10 yrs on the lending side/ and then with the investment side regarding stocks bonds and commodities; and the oil and gas business for another 10 yrs, and then my own consulting business afterwards; so while I have knowledge of a few specialties, I don't profess to know everything- UNLIKE everyone on this board.
Additionally- I think I bring a basis for the things that I speak about. You don't have to agree with them, but I don't live in the world of conspiracies and maybe, woulda, coulda, shoulda- land.
So what did I write that confounded you?
Are you not familiar with LTV's and how they can affect rates and and how they can be leveraged as either collateral or to gain access for cash and artificially show down payment or hand money etc.
lower LTV is lower risk-clearly. And it's due to the fact especially now, that it's commercial property that has had the bigger defaults and issues. Now starting to correct a little bit ,but generally has pockets of high risk. A lower LTV results in more competitive commercial loan terms and rates, whereas a high LTV results in higher risk, and therefore less advantageous loan terms for the borrower
So crafty -yes. Anyone who has been creating / cooking the books on valuations is indeed creating potential false sense of possible lower LTV's and therefore gather better rates than should be granted.
I could go on and on with why that is crafty and manipulative to the folks who are approving a loan. Assume a loan officer, looks at a property and says it worth x, and in order to get the LTV in line to grant the loan, they say that 250k down money is needed, or 2.5 million..whatever. If you think they keep running the books, to see where a larger company pulls a large sum out of another property / via line of credit or submortgages etc. It's all artificial. When anyone does that type of Crafty-ness-yes it's called fraud. It may be harder to prove and while Trump has more assets to get fluidity out, it's still I'm sure a shell game of money, assets and even kiting in some cases. (yet to be proven). The guy has a long history in bankruptcy. I'm betting anyone he ever fucked over with that, is thinking- 'Yep-that's the same shit he pulled with us before he pulled the rug out from under me/ us".
The fact that he can't have a foundation and has been charged with multiple frauds, and that his chief accountant, Weisselberg has been found guilty of it, and pled to perjury, and that Mazars dropped him due to non conformity of GAAP tells me enough to suspect his bad actions.
And that's not even breaking the surface on his taxes, and what he writes off, or claims as a taxable basis on properties, since he clearly lies on the valuations of his 30k foot penthouse, vs. it's 10k ft value. When you say you're not collecting rent on open property and write off that as missed revenue or lost revenue, you know he's using the highest valuation he can- legally or illegally. That's likely why he's constantly been on the IRS audit list. But I digress.
What more did you need to see since you're scoffing at my knowledge??- Oh and please feel free to comment on what expertise you bring to the table sir, since you demeaned mine in the process.
How do ya'll miss the mark by so much?!? The value of a property is whatever the seller is willing to accept from a willing buyer.
A holder (seller) can claim, i.e. value, a property at whatever value they want. It is the market and it's machinations, i.e. banks in this case, that determine if the value is valid.
Interesting that the seller or holder in this case has claimed the valuations of the property to be low when it comes to taxable amounts, but yet says the property is of HIGH value when it comes time to sell. Do you not see the incongruency of those two?
Value is value- it's an estimated "good faith" appraisal and is what both parties of taxation and buyers rely upon.
I realize that it's a great playground for uncouthly oriented folks to dabble and because they can inflate values high or low in most cases with relative impunity. That is until someone screams rat. And indeed someone has screamed it, proved it, and now wants punitive compensation for systemic abuse.
Why have accounting valuations at all in the world you describe- as to where the seller sets the market and all machinations thereto are subject to what a buyer would pay?? Who would benefit from any accounting valuations in that world??
Has anyone here completed loan documents for a substantial business loan ?
The banks have numerous papers to file. Plus it is normally mentioned and/or written during the application process that providing false information is a crime.
So I worked in banking for 10 yrs on the lending side/ and then with the investment side regarding stocks bonds and commodities; and the oil and gas business for another 10 yrs, and then my own consulting business afterwards; so while I have knowledge of a few specialties, I don't profess to know everything- UNLIKE everyone on this board.
Good to know, I'll keep it in mind when reading your posts.
Additionally- I think I bring a basis for the things that I speak about. You don't have to agree with them, but I don't live in the world of conspiracies and maybe, woulda, coulda, shoulda- land.
When it comes to trump, you DO live in a world of conspiracies. You indulge in constant speculation about crimes you think he maybe, coulda, shoulda, woulda committed. You muse about how he must have cooked the books and insinuate he is guilty of every type of business and financial misconduct you can imagine.
So what did I write that confounded you?
I’ll be perfectly blunt - how could you have worked in banking on the lending side for 10 years and suggest any bank would be stupid enough to lend over 100% LTV on a project?
And how could you have worked in banking on the lending side for 10 years and suggest any bank would rely on the borrower’s estimate of a property’s FMV - and not on the estimate provided by either their in-house or an outside independent professional appraisal company?
Are you not familiar with LTV's and how they can affect rates and and how they can be leveraged as either collateral or to gain access for cash and artificially show down payment or hand money etc.
Of course I’m familiar with LTV. Don’t be condescending. Loan to value. 80% LTV means 20% downpayment. Every prudent lender makes sure the borrower has skin in the game. The downpayment is an equity cushion. It reduces the risk that a borrower will walk away if real estate prices decline in a recession. Ever hear of the term “jingle mail”?
Lower LTV is lower risk-clearly... A lower LTV results in more competitive commercial loan terms and rates, whereas a high LTV results in higher risk, and therefore less advantageous loan terms for the borrower.
Yep. Lending 101.
So crafty -yes. Anyone who has been creating / cooking the books on valuations is indeed creating potential false sense of possible lower LTV's and therefore gather better rates than should be granted.
Except that’s not how it works. Whatever the borrower claims a property is worth is totally irrelevant. What’s relevant is what the independent licensed professional appraiser concludes. Heck, anyone who has ever obtained a mortgage knows that. Even adav8s28 understands it, and I don't think he ever worked a day in banking. Go back and read his post #32 in this thread.
I could go on and on with why that is crafty and manipulative to the folks who are approving a loan.
I guess you missed the sarcasm in my comment about trump being crafty.
Assume a loan officer looks at a property and says it's worth x, and in order to get the LTV in line to grant the loan, they say that 250k down money is needed, or 2.5 million... whatever. If you think they keep running the books, to see where a larger company pulls a large sum out of another property / via line of credit or sub-mortgages etc. It's all artificial. When anyone does that type of Crafty-ness-yes it's called fraud. It may be harder to prove and while Trump has more assets to get fluidity out, it's still I'm sure a shell game of money, assets and even kiting in some cases. (yet to be proven).
Wow. There is absolutely nothing wrong with a real estate developer using the equity he has in one property to fund the down-payment for another one. As Mr. Wonderful would say, “it happens all the time!” There’s nothing “crafty” or “artificial” about it. And certainly nothing fraudulent.
Assume you are a successful developer. Your first residential project is highly successful. The condo units are 100% sold and the building has a FMV of $100 million. You’ve paid down the original construction loan to $25 million and now you want to build another condo project. A different bank says ok, but you need to put up $25 million for the new construction loan. So you refinance the first loan for $50 million and use the extra loan proceeds to qualify for the second loan. The first lender is comfortable since your LTV is still only 50%, and the second lender doesn’t give a fuck where the $25 million he required to approve your loan came from. That’s not a “shell game”. That’s real banking.
And that's not even breaking the surface on his taxes, and what he writes off, or claims as a taxable basis on properties, since he clearly lies... That's likely why he's constantly been on the IRS audit list.
Trump is audited because he reports higher income and revenues on his tax returns than 99% of Americans. If he is such a crook and a cheat, why hasn’t the IRS ever filed charges against him? Btw - his personal tax returns were illegally leaked to the public by an IRS contractor, so they’re in the public domain if you want to peruse them. The leaker was just sentenced to 5 years in jail.
What more did you need to see since you're scoffing at my knowledge??- Oh and please feel free to comment on what expertise you bring to the table sir, since you demeaned mine in the process.
I didn’t demean you. And I don’t scoff at your knowledge either, only at your wild speculations and far-fetched theories of fraud. You’re literally frothing at the mouth to nail trump with them, even though they bear no resemblance to the real world of banking that you say you worked in for 10 years.
While I have no opinion necessarily on Oleary,
He fails to mention that ratios on LTV are always important to the loan rate. More risk at higher LTV means a higher rate.
Nobody said that loans weren't being repaid, or that banks were defrauded out of principal. The allegations as I understand it are that Trump inflated assets to get favorable loans, and devalued them when it came to taxes.
LTV has everything to do with the level of fraud being asserted. The common Joe can call any bank and find out that loans cost more at higher LTVs. And the disclosure on applications state "I hereby attest to the information on this application being accurate to the best of my knowledge"
Or something like that.
If you sign a form on your taxes saying that the best of your knowledge is also a low figure, while you attest on a loan application that it's a high value, you can see the dichotomy and where those two items aren't congruent.
As far as my banking experience goes, I dealt with high value clients daily on asset management, and investment strategies. Internal and external. Not so much on loan approval, but certainly on the valuations of assets named in them, and property.
You can't just say they're worth any pie in the sky number, especially if you're using them as collateral, the bank does it's due diligence but it also relies on income statements for business valuation and those are part n parcel of the building valuations also. An example might be a strip mall with five commercial spots vacant, versus that same strip mall with all the parcels fully occupied. Which one is more valuable? It's the same strip mall - of course the one with fully occupied space is more valuable, despite it being made of the same brick and mortar. That's why these business valuations need to be a part of the application process, and clearly Trump has put his fudgy fingers in the mix
While I have no opinion necessarily on O'Leary,
He fails to mention that ratios on LTV are always important to the loan rate. More risk at higher LTV means a higher rate.
Ok, but you weren’t shy about sharing your negative opinion on O’Leary last time:
Everyone who negotiates a real estate loan already knows about the importance of LTV. O'Leary didn’t see any reason to get into the weeds during a CNN interview. As you note below, even a “common Joe” can figure it out.
LTV has everything to do with the level of fraud being asserted. The common Joe can call any bank and find out that loans cost more at higher LTVs. And the disclosure on applications state "I hereby attest to the information on this application being accurate to the best of my knowledge"
Or something like that.
You keep mentioning this loan application provision. But you never mention the DISCLAIMERS that also protect the loan applicants. They state “Lender hereby attests they will make all credit decisions based entirely on their own careful investigation and due diligence, without regard to anything the applicant has stated or not stated.”
Or something like that.
... the bank does its due diligence but it also relies on income statements for business valuation and those are part n parcel of the building valuations also. An example might be a strip mall with five commercial spots vacant, versus that same strip mall with all the parcels fully occupied. Which one is more valuable? It's the same strip mall - of course the one with fully occupied space is more valuable, despite it being made of the same brick and mortar. That's why these business valuations need to be a part of the application process, and clearly Trump has put his fudgy fingers in the mix.
Any professional appraiser can quickly figure out if a commercial property is empty versus partially or fully leased out. As part of the appraisal process, they ask to see the lease agreements signed by all tenants. They determine if any tenants are delinquent or in arrears on their rent. And yes, they cross-check the owner’s income statement to verify the property’s rent roll matches up with what is shown on the audited financial statements. In your example, they know how to appraise the fully leased strip mall higher than a comparable one with 5 vacancies.
It would be almost impossible for any commercial owner/loan applicant to misrepresent all of this and slip it past an experienced appraiser hired by the bank.
Fraud has already been judged.
It is a matter of what Mr. Trump will need to pay.
Sheesh, VitaMan you've already said this a dozen times now.
Why are you so eager to squelch criticism of Engeron's kangaroo court decision?
It was a summary judgment issued from the bench right out of the box in favor of Engeron's fellow ultra-progressive Democrat NY State AG Tish James, who was elected on a promise to "get Trump".
Here's the decision for all you legal beagles out there:
I hear through the grapevine that Judge Kangaroo is probably going to award something close to the ridiculous, gargantuan $370 million (up from an original $250 million) being sought by his gal Tish in "disgorgement damages".
All this in a civil case where 1) no one was actually harmed, 2) Trump is hardly the first New York businessman to exaggerate his wealth, 3) the punishment does not fit the "crime", and 4) everyone knows it's a partisan hit job.
Stay tuned. The pushback on this will be enormous.
Any professional appraiser can quickly figure out if a commercial property is empty versus partially or fully leased out. As part of the appraisal process, they ask to see the lease agreements signed by all tenants. They determine if any tenants are delinquent or in arrears on their rent. And yes, they cross-check the owner’s income statement to verify the property’s rent roll matches up with what is shown on the audited financial statements. In your example, they know how to appraise the fully leased strip mall higher than a comparable one with 5 vacancies.
It would be almost impossible for any commercial owner/loan applicant to misrepresent all of this and slip it past an experienced appraiser hired by the bank.
You say it's all on the banks responsibility side.
They have to do the due diligence.
Then why do they ask for ANY input from a borrower?
Why do they want income statements?
Why is there disclaimers on the application side about being truthful and best of knowledge and subject to legal review etc. and under penalty of law?
Every lender looks at the 5Cs.
The 5 Cs of Credit analysis are - Character, Capacity, Capital, Collateral, and Conditions. They are used by lenders to evaluate a borrower’s creditworthiness and include factors such as the borrower’s reputation, income, assets, collateral, and the economic conditions impacting repayment.
Trump has been inaccurate in almost every single one of those Cs, save the last one, which he isn't really in control of.
Why do you not acknowledge there are responsibilities for borrowers to be truthful on their applications when there are clearly marked disclosures stating they must be.
A loan doesn't have to be in default for a bank to be harmed, or it's shareholders defrauded, unlike the claims of our conservative talking heads and supporters.
Every loan is an investment. All investments have grades of quality. If a loan is written below grade the bank suffers by reputation and normally is compensated at a higher rate of return for the higher risk. All things aside Trump loans are likely some of the lowest quality while reviewing the above Cs. If the loans were in any way reliant on false data, the bank and it's shareholders are harmed by not receiving the interest or down payment or classification of the loans and it's perceived quality. Often loans are sold to other lenders also, and if that loan was deemed a lower quality post it's origination, the value could go down significantly enough to not getting a full AMT of value. Most banks of large scope do a ton of origination but ultimately get rid of loans after a while so as to make more money on originating a new one.
Remember how the claims of lending came from Russia or other banks. Likely because they do NOT follow normal banking procedures or policies. It would not surprise me at all if Trump's loans are almost all interest only loans and considered below standards. It would be interesting to see if he ever paid off any property with either cash or full amortization of payments. I'd say that is 100% unlikely.
(sorry to have to use that expression, but it fits here)
You frame the other false document case in political terms also, so you are 2 for 2.
imitation is the sincerest form of flattery
Quote:
Originally Posted by eyecu2
You say it's all on the banks responsibility side.
They have to do the due diligence.
Then why do they ask for ANY input from a borrower?
Why do they want income statements?
Why is there disclaimers on the application side about being truthful and best of knowledge and subject to legal review etc. and under penalty of law?
Every lender looks at the 5Cs.
The 5 Cs of Credit analysis are - Character, Capacity, Capital, Collateral, and Conditions. They are used by lenders to evaluate a borrower’s creditworthiness and include factors such as the borrower’s reputation, income, assets, collateral, and the economic conditions impacting repayment.
Trump has been inaccurate in almost every single one of those Cs, save the last one, which he isn't really in control of.
Why do you not acknowledge there are responsibilities for borrowers to be truthful on their applications when there are clearly marked disclosures stating they must be.
A loan doesn't have to be in default for a bank to be harmed, or it's shareholders defrauded, unlike the claims of our conservative talking heads and supporters.
Every loan is an investment. All investments have grades of quality. If a loan is written below grade the bank suffers by reputation and normally is compensated at a higher rate of return for the higher risk. All things aside Trump loans are likely some of the lowest quality while reviewing the above Cs. If the loans were in any way reliant on false data, the bank and it's shareholders are harmed by not receiving the interest or down payment or classification of the loans and it's perceived quality. Often loans are sold to other lenders also, and if that loan was deemed a lower quality post it's origination, the value could go down significantly enough to not getting a full AMT of value. Most banks of large scope do a ton of origination but ultimately get rid of loans after a while so as to make more money on originating a new one.
Remember how the claims of lending came from Russia or other banks. Likely because they do NOT follow normal banking procedures or policies. It would not surprise me at all if Trump's loans are almost all interest only loans and considered below standards. It would be interesting to see if he ever paid off any property with either cash or full amortization of payments. I'd say that is 100% unlikely.
you know why. it's part of the application process like you've done many times. as has Trump. the banks did their due diligence .. they lent Trump money and he payed it back.
it's part of the application process like you've done many times. as has Trump. the banks did their due diligence .. they lent Trump money and he payed it back.
i fail to see the actual crime here?
I explained explicitly how a bank is harmed by mischaracterization of loans by fraudulent means. Apparently you didn't understand it, or refuse to see that a loan issued by a bank, could be considered a asset that gets sold to other banks. Face value is 100% and if they sell it, they may be forced to sell at a significant discount if the relied upon values were based in fraud and false values.
Some here would say that that's 100% diligence on the bank, but it's a partnership when two people enter into a loan. The lender, who relies upon the valuation of the property by appraisal, and also the collateral used against the loan which sometimes is relied upon by the actual books or valuations produced by the loan applicant.
Another way to look at it is have you ever received a increase in any credit line, based upon a bank asking you what your income was, and they increased it because your income had increased? They will always confirm that via email or electronically where you tell them what your income is, etc.
Banks can pull lots of financial data off your credit report, but lenders are rarely privy to anything outside of what's reported - sometimes they request your tax return schedules information AKA cash flow; some will, some won't, They rely upon good lending and repayment history, and any increases in your income to give you an increase in that credit line. If Trump claimed higher net incomes or values, that would be inconsistent with the truth, and illegal.
Trumps fraudulent statements of valuations is just one part of the collateral equation, LTV, and subsequent rates when he lies about them or shows a book of rentals at 100% and perhaps they really are at 70-80%. He writes high losses on empty property for taxes, at inflated market valuations, while claiming the property has a 100% valuation at the loan process again at hyper inflated values to show a better LTV result. If those banks went to sell his loan, they would get shellacked on rebundling it or the like.
That harms banks, share holders, officers in the bank, tax payers who do pay their fair share, and tax coffers. He doesn't have to default on a loan in order to harm ppl.
