Time for some proper due diligence/ independent auditing in our communities

[coffeebean]

see whos angry with this post - very telling...
https://www.linkedin.com/posts/activity-7069021402976133120-XuxK?utm_source=share&utm_medium=member_desktop

Anyone who's angry is a fraud?

[S209]

can u please give summary of all three. how much $ was involved in each and did they all result in foreclosures of multiple properties?
(names dont matter and i would rather not hear- LH alert)

The huge one? 250 million lost. Properties are fine which is small comfort to the investors who now own a very diluted share.

[yoohoo]

Was the Cash Advance ponzi just uncovered discussed yet?

[Mordyk]

Was the Cash Advance ponzi just uncovered discussed yet?

what now? 

crazy whats going on. If only people would be diligent when they are loose with money same as when they get a bit uncomfortable and start digging to see where their money is...

[Euclid]

The Fed raising interest rates really pulled the clothes off a lot of emperors.

[gubevo18]

Was the Cash Advance ponzi just uncovered discussed yet?

What's this one?

[knowitall]

Was the Cash Advance ponzi just uncovered discussed yet?

It’s crazy.

Can we go 2 weeks without another story?

[Moish613]

Was the Cash Advance ponzi just uncovered discussed yet?

A lot of "outside" money is involved in this one.

[ari3]

The huge one? 250 million lost. Properties are fine which is small comfort to the investors who now own a very diluted share.

How does an investor end up with a "very diluted share" without outright fraud and embezzlement? How is 250 million lost without massive defaults or bankruptcies?

[Abebee]

A lot of "outside" money is involved in this one.

What happened here?

[dealfinder11]

50 million - MCA Ponzi. From what i heard, all from the same community in TR. Really hope it's not true.

[avromie7]

50 million - MCA Ponzi. From what i heard, all from the same community in TR. Really hope it's not true.

A friend in the industry told me the numbers being spread are way over exaggerated.

[avromie7]

How does an investor end up with a "very diluted share" without outright fraud and embezzlement? How is 250 million lost without massive defaults or bankruptcies?

I don't know what happened and which story he's referring to, but if a deal go bad and someone needs to save it with a cash influx, whoever brought the cash will keep a   portion of the deal.

[YitzyS]

Reading this thread makes me thank Hashem that I'm poor enough to not have to worry about these things... 

[knowitall]

The huge one? 250 million lost. Properties are fine which is small comfort to the investors who now own a very diluted share.

There’s no way this $250M figure is remotely accurate. Perhaps the total value of all the properties is $250M, but I’m hearing they are mostly doing well. 

[S209]

How does an investor end up with a "very diluted share" without outright fraud and embezzlement? How is 250 million lost without massive defaults or bankruptcies?

Who said there wasn’t outright fraud and embezzlement? This is the case where investors were “skimming”.

There’s no way this $250M figure is remotely accurate. Perhaps the total value of all the properties is $250M, but I’m hearing they are mostly doing well. 

Possibly. My source isn’t necessarily more accurate than any others. I heard the total value was over half a billion and the underlying properties are fine but there was a lot of “skimming” going on for quite a while.

[mevinyavin]

Today's FT. Didn't read it.

[liosac]

Today's FT. Didn't read it.

The last paragraph is puzzling. Selling the loans at a 5% discount isn’t really selling at a loss out of desperation. A loan made at 3.5% is simply worth less than full value today even if there is no pressure to sell, since it is paying well under the going rate of interest. The same would be true if the bank holding your home mortgage at 2.5% tried to sell the note today.  Actually, if it is being sold in a 6.5% environment it should sell at far more than a 5% discount unless it has a really short maturity. The fact that the debt is discounted is a function of interest rates, not the health of CRE.

[mevinyavin]

The last paragraph is puzzling. Selling the loans at a 5% discount isn’t really selling at a loss out of desperation. A loan made at 3.5% is simply worth less than full value today even if there is no pressure to sell, since it is paying well under the going rate of interest. The same would be true if the bank holding your home mortgage at 2.5% tried to sell the note today.  Actually, if it is being sold in a 6.5% environment it should sell at far more than a 5% discount unless it has a really short maturity. The fact that the debt is discounted is a function of interest rates, not the health of CRE.

I wouldn't find it surprising that something is being overhyped in a paper, though a bit surprising because if any paper is supposed to know money, it is FT. And this on a front page article.
(Not that I have any way of assessing this stuff myself. I can critique an article about laptops, maybe.)

[AsherO]

The last paragraph is puzzling. Selling the loans at a 5% discount isn’t really selling at a loss out of desperation. A loan made at 3.5% is simply worth less than full value today even if there is no pressure to sell, since it is paying well under the going rate of interest. The same would be true if the bank holding your home mortgage at 2.5% tried to sell the note today.  Actually, if it is being sold in a 6.5% environment it should sell at far more than a 5% discount unless it has a really short maturity. The fact that the debt is discounted is a function of interest rates, not the health of CRE.

I think 5% loss they’re willing to take is 5% on the current value of the loan, not 5% of interest.

If the loans are a loss to them at current rates, isn’t that true regardless of whether they keep them or sell them?