Are bank hiding the next trillion dollar real estate crash?
What's needed are hard metrics: What is the amount of debt for each property along with its current…
Ratios of monthly or quarterly hard operating data can do the job. A very simple and auditable measure is Interest Expense as a % of Property Income, or more narrowly, Rents Received. For any situation in which a 6-month rolling average for that figure runs above 50%, the lenders should start writing down the value of their loans, even if they don't let the borrower off the hook.
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