President Trump is in a spot of bother because the New York Attorney General is concerned that he overestimated his net worth and the value of some of his properties.
If memory serves, EVERY bank (public corporations, I might add) refused to mark-to-market assets that were not performing in 2009. Furthermore, they refused to mark-to-market other assets in those tranches.
The real-estate values peaked in August 2006 with a median, adjusted CPI value of $314k.
Median values slid until February, 2012 to an adjusted CPI value of $222k...if you could find a buyer.
Both Q4, 2009 and Q1, 2010 loans printed a 90 day "nonperformance rate" of more than 5.6% vs a historical average of about 1.0%.
Assuming 50 million houses + duplexes in the US, does Attorney General Letitia James have any intention of prosecuting the banks "hiding" the fact that $5 TRILLION of assets vaporized. $5 TRILLION dwarfs the amount of value that President Trump supposedly assigned to some of his property.
OK, I get that the Statute of Limitations probably expired...but what comes around goes around.
If real-estate valuations go in the toilet over the next 6 months, will Leti be bird-dogging the banks and prosecuting CEOs and CFOs for lapses in mark-to-market?
Just asking for a friend. I am sure Leti will be extremely popular when she started poking around the records of those New York banks.
I worked in NYC and the surrounding states and this is nothing new from The Donald. In the 90's he would apply for a loan putting a piece of property up as collateral. To keep the math simple, Chase Manhattan would say the property was worth $50 million. The Donald would say it was worth $ 75 million because it was a Trump property and convince the bank to spring for more cash.
ReplyDeleteNYC would say we have come to collect taxes on that $75 million piece of property Mr. Trump. The Donald would say, you mean that $25 million piece of urban blight?
This went on between lenders, the Trump empire and tax officials forever and no one got bent out of shape about it till The Donald became the Evil Orange Tweet Monster. The fact that the NYAG filed a civil suit and not a criminal one highlights that. No lender will want to testify at that hearing.
This looks like yet another politically motivated attack on him, which unfortunately isn't surprising.
DeleteThe Dems, particularly in NY, are scared at the thought he might run again.
Leti poking around in those records; no way, she knows which side of her bread is buttered.
ReplyDeleteValuations are highly subjective. Every Tax Court case I've ever read where the dispute was on valuations, the IRS lost. They don't have the in-house expertise (at least not the expertise they think they have), and the usually wealthy individuals they tangle with can hire the best.
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