Meet Edward Brown
Edward Brown currently
hosts two radio shows, The
Best of Investing and Sports
Econ 101. He is also in the
Investor Relations
department for Pacific
Private Money, a private real
estate lending company.
Edward has published many
articles in various financial magazines as well as
been an expert on CNN, in addition to appearing as
an expert witness and consultant in cases involving
investments and analysis of financial statements
and tax returns.
a low LTV on one property compared to having crossed
on one or more additional properties that have a higher
LTV. Additional costs of foreclosure, if needed on more
than one property, as well as having to deal with an
existing first mortgage [keeping them current, so that
lender does not foreclose] may not be a desirable solution
to protecting the lender’s interest.
Many lenders may be willing to work out a reasonable
amount for releasing either property, as it is in the lenders
best interest to reduce the borrower’s default risk. Having
more than one property as collateral sounds good in
principle, but the added exposure of having a loan spread
out amongst more than one property may not be worth the
risk. Each situation will be different, but, as a general rule,
it is more conservative from the lender’s viewpoint to
have a low LTV on one property compared to having
crossed on one or more additional properties that have a
higher LTV. Additional costs of foreclosure, if needed on
more than one property, as well as having to deal with an
existing first mortgage [keeping them current, so that
lender does not foreclose] may not be a desirable solution
to protecting the lender’s interest.
This is the primary reason why typical banks do not
usually cross collateralize their loans. Most banks do not
like a lot of moving parts. They want to focus on one
property and the risk associated with it.
Borrowers should make sure that the lender does not
hold any of the borrower’s properties hostage and that
release prices are set at a point where the borrower feel
comfortable.
Edward Brown, Host
The Best of Investing on KDOW AM1220
on Saturdays at noon
18